Tax Freedom Day - Find Out the Date that You Get to Keep Your Money Instead of the Government

Chances are you haven't heard of The Tax Foundation. It was founded in 1937 as a non-partisan tax research organization and has been committed to informing American taxpayers about the United States tax system ever since.

The Tax Foundation believes that tax policy should be easy to understand and that tax laws shouldn't be consistently changing. The Tax Foundation also firmly believes that the purpose of taxes is to raise only necessary funds for needed programs with as little disruptance to economic growth as possible.

The Tax Foundation formulated "Tax Freedom Day". This is the day that your salary finally starts going into your pocket instead of to the government. Can you guess the date? End of January, middle of February maybe? If that was the range you were guessing, you are horribly mistaken.

In 2006, Tax Freedom Day was April 26. It changes each year depending upon tax cuts, economic growth and other varying factors. Usually, it arrives later each year. The Tax Freedom Day in 2006 was three days later than in 2005, for example. The latest Tax Freedom Day so far has been in 2000. Tax Freedom Day didn't arrive that year until May 3 due to the economic boom pushing tax rates to record highs.

Tax Freedom Day doesn't take holidays or weekends into account. Tax Freedom Day is the date you would be able to start keeping your own money if you worked seven days a week, including holidays.

How is Tax Freedom Day calculated? Official records of taxes collected during the year is divided by all income earned during the year. This includes state and local taxes. All income brackets are also calculated, both high and low. The final date is the true average across all Americans' taxes.

So your own personal Tax Freedom Day will be different. Higher incomes will have a later date, lower incomes an earlier Tax Freedom Day. The state that you live in also determines when your personal Tax Freedom Day arrives.