Today, New Jersey and Connecticut are the last two states to reach Tax Freedom Day, the date on which residents in each state have earned enough collective income to pay off their total federal, state, and local tax bill, according the nonpartisan Tax Foundation’s annual report.
For residents of the Constitution State and the Garden State, the date arrives 128 days into 2014 and 23 days after the federal tax filing deadline. Louisiana (Mar 30), Mississippi (Apr 2), and South Dakota (Apr 4) were the first states to arrive more than a month ago.
The national Tax Freedom Day arrived on Apr 21, but the total tax burden borne by residents of different states varies considerably due to differing state tax policies and because of the progressivity of the federal tax system. This means a combination of higher-income and higher-tax states celebrate Tax Freedom Day later.
Tax Freedom Day is a significant date for taxpayers and lawmakers because it represents how long Americans as a whole have to work in order to pay the nation’s tax burden.
“Arguments can be made for why the collective tax bill is too high or too low, but in order to have an honest discussion, it’s important to understand where we stand,” said Tax Foundation Economist Kyle Pomerleau. “Tax Freedom Day gives us a vivid representation of how much we pay for the goods and services provided by governments at all levels.”
Full report: Tax Freedom Day 2014