News Column

California 'Tax Freedom Day' 4 Days Later In 2012

April 2, 2012

Jan Norman

Californians will work 111 days -- until April 20 -- to earn enough to pay their federal, state and local taxes, according to the Tax Foundation, a nonprofit tax education group.

That's four days longer than in 2011. However, the Golden State falls to 11th latest to hit Tax Freedom Day among the 50 states; it was 5th in 2011 as other states either increased taxes or boosted total revenues from faster economic recovery.

The national Tax Freedom Day is April 17, four days later than in 2011.

"Americans spend more on taxes than on food, housing and clothing combined," said Tax Foundation economist William McBride, who wrote this year's report.

The Tax Foundation has been calculating the calendar-based measure of the cost of government for 40 years. The idea started with Florida businessman Dallas Hostetler in 1948. Now, 24 other nations also calculate their own tax freedom days, said Tax Foundation Vice President Joe Henchman.

The calculation includes all personal, payroll, corporate, property and sales/excise taxes, McBride said. In recent years, the Tax Foundation has calculated separately Tax Freedom Day including the federal deficit. This year that date is May 14, just a week shy of the record set in 1945.

Tax Freedom Day is influenced not only by tax rates but also total tax collections that rise as the economy recovers, McBride said. He who attributes this year's later date "mainly to increased tax collections from the rebounding economy. It would be three days later without the extension of the 'payroll tax holiday.'"

The states with the latest Tax Freedom Day are:

-- Connecticut, May 5

-- New Jersey and New York, May 1

-- Washington, April 24

-- Wyoming, Maryland and Illinois, April 23

-- Minnesota and Massachusetts, April 22

-- Wisconsin, April 21

-- California, April 20

"The total tax burden borne by residents of different states varies considerably, not only due to differing state tax policies, but also because of the steep progressivity of the federal tax system. This means higher-income states celebrate Tax Freedom Day later," the report said.

The earliest Tax Freedom Days are in:

-- Tennessee, March 31

-- Louisiana and Mississippi, April 1

-- South Carolina, April 3

-- South Dakota, April 4

Source: (c)2012 The Orange County Register (Santa Ana, Calif.)