Tax Day 2012: Taxmageddon on the Horizon
In a bit of scheduling serendipity, Tax Freedom Day—the day when Americans finally earn enough income to pay off the bill for all federal, state, and local taxes for the year—falls on April 17 this year. That also happens to be Tax Filing Day 2012.
Absent tax changes made by Congress, Tax Freedom Day moves earlier or later in the calendar from year to year based on the economy. If the economy is stronger, then more Americans are working and wages are rising. Larger incomes mean they pay more taxes and Tax Freedom day falls later in the year. The reverse happens when the economy is weak, as it is today.
Tax Freedom Day next year promises to be much later than April 17, but unfortunately not because of a strong economy, which even the Obama Administration is not predicting. No, Tax Freedom Day will be much later if Congress and President Obama fail to act promptly and prevent Taxmageddon from striking America’s families and small businesses.