Across the Nation

State Tax Freedom Day Arrives Much Later for Some

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If it feels like you forfeited more of your paycheck this past year than years prior, the pain is likely real. Each year, the Tax Foundation computes the national Tax Freedom Day as well as each of the 50 states’ freedom days (plus Washington, D.C.). This is the date on which the income earned across the state is equal to all of that year’s state, local, and federal taxes. This year, the arrival of each state’s estimated Tax Freedom Day was delayed by at least an additional day. In the case of Maryland residents, an increased tax burden will delay freedom by more than a week. While the national Tax Freedom Day fell on April 24 this year, the state’s freedom day estimate is May 5.

Louisiana vs. Connecticut: Contrasting State Tax Burdens

While no state escapes a sizable overall burden, the date of escape varies significantly. In Louisiana, which has the earliest state Tax Freedom Day in 2015, freedom arrived on April 2. But the state of Connecticut will be working until May 13 to meet their tax obligations for the year.

There’s a significant geographic contrast between state tax burdens. Residents in California and the northeastern states of Connecticut, Massachusetts, Maryland, New York, and New Jersey toil into the month of May to meet their tax burdens. In stark contrast, the southern states of Alabama, Kentucky, Louisiana, Tennessee, Mississippi, South Carolina, and West Virginia enjoy much earlier freedom days. In Louisiana, this equals 41 days of labor escaping the hands of the taxman in 2015, relative to Connecticut.

More Income Tax Doesn’t Mean More Firefighters

Much of this nearly six-week disparity is caused by variances in state and local taxes. Consider that a person living in Los Angeles pays up to 13 percent in state and local income taxes. Meanwhile, someone living in Dallas, Miami, or Nashville won’t pay a single dime. Oftentimes, higher-tax locales also suffer from inefficient governance, which can drain taxpayers. For example, Texas provides more firefighters, police, and teachers per capita while spending less per capita doing so than high-tax California. The result? Tax Freedom Day in Dallas arrives 16 days before it arrives in Los Angeles.

U.S. Census Bureau data over the past decade shows that people are being drawn to states with lower tax burdens and leaving the highest tax states. This is no surprise. State government policies are of high importance to individual lives, and the six-week variance in Tax Freedom Day bears testament to this. Salvaging more than a month’s worth of income from another state’s taxman is an appealing concept.

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Joel Griffith is an attorney, writer, and financial professional based in Washington, DC. Presently, he is a research associate in the Chief Economist's Office at The Heritage Foundation. Joel graduated from the Chapman University School of Law where he was Treasurer of the Investment Law Society at Chapman and vice-president of the Chapman chapter of the California Republican Lawyers Association. In Throughout the 2012 election season, he worked for a presidential campaign as MI state field director, OH state operations director, and parliamentarian/assistant delegate strategist in WA . Joel also serves as DC Chair of the Young Jewish Conservatives.