(CNSNews.com) - The average American only has a couple of more weeks to work for Uncle Sam and, as of April 27, will have earned enough money this year to satisfy his or her federal income tax burden. "Tax Freedom Day," as proclaimed by a group known as the Tax Foundation, will occur two days earlier than last year and four days earlier than in 2000.
But Tax Freedom Day, which the Tax Foundation calculates each year, doesn't take into account state or local tax obligations. Freedom from the entire income tax burden differs depending on the state in which you live.
Scott Hodge, executive director of the Tax Foundation, said the Bush tax cut plan was a key factor in Tax Freedom Day occurring earlier this year.
"Had it not been for the enactment of President Bush's $1.3 trillion dollar tax cut plan and the mild (economic) recession which dampened tax collections, Washington would have continued to take a greater and greater share of Americans income," said Hodge at a Washington news conference.
Hodge also said the foundation's research found that the tax burden on Americans has fallen by its largest amount since the Reagan administration, but, in Hodge's view, is still too high.
"This year, as Americans have for a decade or so, will work longer to pay for their government than they will work to pay for food, clothing and shelter combined. In fact, Americans will work 80 days just to pay their federal taxes alone, which is greater than they will work to pay for any other single household item," said Hodge.
But Hodge believes there is still bad news for taxpayers from their nation's capital.
"While Washington has done a good deal to cut their taxes in recent years -- there have been three tax cuts in the last five years -- politicians have done so in a way that has added a staggering amount of complexity to a (federal) tax code that no one understands to begin with," said Hodge.
Hodge believes the cost of the tax code complexity will negate many of the benefits that Americans are supposed to enjoy from the tax cuts themselves. One of those areas is tax preparation, because many people and businesses have had to pay huge amounts of money to have their tax forms completed.
"We estimate that individual and corporate taxpayers will spend $194 billion this year to comply with just the income tax code alone," Hodge said. "Our estimates only include the cost of keeping records and the value of people's time to fill out the (tax) forms. One hundred ninety-four billion dollars is greater than the combined revenues of Sears, Walt Disney, Microsoft, Rite Aid, McDonalds and Radio Shack combined," said Hodge.
"Americans will spend a record 5-point-8 billion hours this year on tax compliance, which is equal to a full time workforce of 2-point-8 million people doing nothing but IRS paperwork," he added. "That's equal to the entire population combined of cities like Detroit, Dallas and Washington, D.C."
House Republican Leader Dick Armey (R-Texas) agrees.
Armey Wednesday released what he called "a series of facts on the 2002 tax filing season," highlighting changes in the tax code since Congress enacted the president's tax relief plan last year.
"Americans today continue to be caught in a tax trap," said Armey. "They work harder yet end up keeping less and less of what they earn. Hardworking taxpayers demand and deserve a fairer, simpler tax code so April 15th will be just another normal day."
The Tax Foundation found that Washington, D.C. residents have the worst overall tax burden of any place in the country and won't be free of their tax burdens until May 17. Connecticut's tax burden is heaviest among the 50 states. Residents of the Nutmeg State will have to work until May 14 to meet all of their tax obligations. The next worst is Washington State, where residents will have to work until May 9 to earn enough to pay all of their taxes.
Alaskans will bear the lowest tax burden this year. They completed their responsibilities, on average, April 8. Oklahoma is next -- April 15 -- while residents of West Virginia, Tennessee and Alabama are free of their tax burden a day later, April 16.
Scott Moody, senior economist for the Tax Foundation, said, "in stark contrast to the federal tax burden, the state and local tax burdens have held fairly steady over the past decade."
"State and local taxes tend to be less progressive than the federal tax system. With a progressive tax system, taxes grow at a faster rate than income. This is a result of taxpayers moving into higher tax brackets. While the federal government collects 60 percent of its revenue from income taxes, state and local governments receive only 32 percent of revenue from such income taxes," said Moody.
State and local governments also receive revenue from sales taxes and property taxes, "which do not grow as fast as income (taxes)," Moody said.
Moody also said many states during the last decade have responded to constituents' demands and returned budget surpluses to the taxpayers in forms of rebates and other tax reductions.
The Tax Foundation has calculated Tax Freedom Day each year since 1972, using data from the U.S. Commerce Department's Bureau of Economic Analysis.
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