Tax Freedom Day Arrives In North Carolina | Eastern North Carolina Now

    Publisher's note: The author of this post is Barry Smith, who is an associate editor to the Carolina Journal, John Hood Publisher.

Measurement of N.C.'s total cost of government is eight days earlier than national date

    RALEIGH     While April 15 is on the minds of many taxpayers scurrying to meet the income tax filing deadline, two other dates - April 10 and April 18 - might also be in the minds of taxpayers, if only for symbolic reasons.

    April 18 is Tax Freedom Day in the United States. That's the theoretical date the average American taxpayer quits working for the government and starts working for himself.

    "This is a calendar-based measure of the cost of government," explained William McBride, chief economist at the Tax Foundation. The date is derived by totaling the taxes paid at the federal, state, and local levels, and dividing it by total personal income.

    Since state and local governments have varying tax rates and policies, state Tax Freedom Days also vary. In North Carolina, Tax Freedom Day occurs April 10 this year, eight days earlier than the national date.

    The earliest state Tax Freedom Day is March 29, "celebrated" by Mississippi and Louisiana. The latest occurs May 13 in Connecticut.

    All of North Carolina's border states except Virginia have earlier Tax Freedom Days than the Tar Heel State. Tennessee's is April 2. South Carolina's is April 3. Georgia's is April 9. Virginia's occurs April 20.

    This year, the national Tax Freedom Day occurs five days later than last year.

    McBride said there are three major causes of Tax Freedom Day being later than last year.

    "The biggest one is the fiscal cliff deal, that raised federal income and payroll taxes," McBride said. "Second, there is the Affordable Care Act taxes that go into effect this year."

    Lastly, as incomes grow, taxpayers' rates go up, McBride said.

    Americans will pay $2.76 trillion in federal taxes in 2013, McBride said. They'll also pay $1.46 trillion in state and local taxes. Those taxes come to 29.4 percent of total income, he added.

    "On the calendar that comes to 108 days to pay that tax burden," McBride said.

    "Total taxes paid on the federal, state, and local level amount to more money spent than money spent on food, clothing, and housing combined," McBride said.

    "Tax Freedom Day was once very early in the year," McBride said. "A hundred years ago, it was in January."

    It has increased steadily, he said, particularly during the Great Depression years and during World War II.

    In fact, spending during World War II put Tax Freedom Day at its latest date on record in 1945, when it occurred May 21.

    "The biggest tax by far is the individual income tax," McBride said. Next comes the payroll tax, followed by sales and excise taxes, property taxes, and corporate income taxes.