Wednesday, April 15, 2009
Every year, the Tax Foundation announces Tax Freedom Day—the day that Americans have supposedly worked enough days to pay their taxes. And every year, some poor saps in the media fall for it.
It's a bogus statistic because of the progressive nature of income taxes. The rich pay a whole lot more than the poor, so there is no real average that means anything at all.
The Tax Foundation’s “Tax Freedom Day” report is plagued by two major problems. First, its estimates of state and local tax burdens suffer from a number of serious methodological flaws (see the box below). Second, over the years, many journalists and policymakers have misinterpreted the Tax Foundation’s report as reflecting the tax burdens faced by typical middle-income workers.