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Tax Freedom? You'll Have To Work Until April 26

Tax Freedom Day 10 Days Later Than 2004

Posted: 9:21 am EDT April 12, 2006Updated: 9:37 am EDT April 12, 2006

The Tax Foundation reported on Wednesday that Tax Freedom Day will be arriving April 26 this year.

Tax Freedom Day calculates how many days you have to work to pay off your taxes.

In the days leading up to it, everything you earn is paid in taxes. After that day, everything you earn -- you keep.

This year it's taking three days longer than last year and 10 days longer than in 2004 and 2003.

In those two years, a combination of slow income growth and tax cuts caused Tax Freedom Day to arrive comparatively early.

This year, Americans are working an average of 77 days to take care of their federal taxes and another 39 days to cover state and local taxes.

According to the Tax Foundation, that makes taxation a bigger financial burden than housing and household operation (62 days), health and medical care (52 days), food (30 days), transportation (30 days), recreation (22 days), or clothing and accessories (14 days).

"Despite all the tax cuts that the federal government has passed recently, Americans will still spend more on taxes than they spend on food, clothing and housing combined," said Tax Foundation President Scott Hodge.

Here’s the Tax Foundation's top 10 list of the states with the heaviest tax burdens and the latest Tax Freedom Days.
  1. Connecticut (May 12)
  2. New York (May 9)
  3. New Jersey (May 6)
  4. Washington (May 4)
  5. Minnesota (May 3)
  6. Massachusetts (May 2)
  7. Maine (May 1)
  8. Rhode Island (May 1)
  9. California (April 30)
  10. Illinois (April 30)
The Tax Foundation said the states that celebrate Tax Freedom Day later due so because of the progressive federal income tax.

States with large metropolitan areas offer higher-paying jobs. As a result, many residents pay income tax at the highest rates -- 25 percent, 28 percent, 33 percent and 35 percent. As a result, they have to work longer to pay their share of the tax burden.

Here's a list of the 10 states that celebrate Tax Freedom Day the earliest, according to the Tax Foundation.
  1. Alabama (April 11)
  2. Alaska (April 12)
  3. Mississippi (April 13)
  4. Oklahoma (April 14)
  5. Tennessee (April 14)
  6. New Mexico (April 15)
  7. South Dakota (April 16)
  8. Montana (April 16)
  9. Idaho (April 16)
  10. West Virginia (April 17)
The Tax Foundation said states that celebrate Tax Freedom Day early do so because the average income is lower. They pay most of their federal income taxes at the lower rates, 10 percent and 15 percent.

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