This article was published by The McAlvany Intelligence Advisor on Wednesday, April 17, 2019:
Of course the Tax Foundation doesn’t call it serfdom or slavery. They’re far too kind. Instead they simply report what they found: “Tax Freedom Day is the day when the nation as a whole has earned enough money to pay its total tax bill for the year.” This year, ironically, TFD happened on Tuesday, the day after every worker’s income tax return was due. That’s five days sooner than in 2017, before Trump’s Tax Cuts and Jobs Act kicked in.
That total tax bill is enormous: $5.2 trillion, or nearly a third of the nation’s total income. On a per worker basis it’s a little more manageable, but barely: On a per-worker basis, the $34,578 total tax bill consists of $13,831 in federal, state, and local income taxes; $8,562 in payroll taxes; $4,940 in sales and excise taxes; $3,622 in real estate taxes; and $1,976 in estate, inheritance, customs duties, and other taxes; and $1,647 in corporate taxes.
And if deficit spending (future tax liability) is figured in, then the total tax bill would be $40,300 and Tax Freedom Day wouldn’t be April 16 but May 22.
Altogether then, the American worker pays $5.2 trillion in taxes, more than for food, clothing, and housing put together.
Tax Freedom Day (TFD) depends on which state one lives in. A taxpayer in Alaska, for instance, enjoys TFD on March 25, while one living in Oklahoma enjoys his freedom on March 30. On the other hand, taxpayers living in New York don’t get out from under their liability until May 3.
Future Tax Freedom Days are likely to be later and later, thanks not only to increasing deficit spending by the federal government, but for other reasons as well.
Only about half of the 138 million workers who file income tax returns have a federal income tax liability. Another estimated 20 percent of taxable income never gets reported. And some work hard to evade their liabilities altogether.
Al Capone served seven years in Alcatraz for tax evasion starting in 1932, while Dutch Schultz avoided prison for tax evasion altogether by skipping town and disappearing.
In 1972, Rep. Neil Gallagher (D-N.J.) was sentenced to two years in jail for tax evasion. In 1974, Illinois Governor Otto Kerner, Jr. was sentenced to three years in jail and fined $50,000 for evading the taxman.
In 1982, Rep. Fred Richmond (D-N.Y.) was convicted of tax evasion and served nine months in prison. In 1986, Harry Claiborne, a district court judge, was convicted of tax evasion and spent a year in jail. In 1991, Harry Mohney, at one point the single largest distributor of pornography in the world, spent three years in jail for evading taxes. In 1995, Webb Hubbell, appointed by President Bill Clinton as Associate Attorney General, pleaded guilty to tax evasion and was sentenced to 21 months in prison.
In 2002, Rep. James Traficant (D-Ohio) was sentenced to eight years in prison for tax evasion. In 2005, Rep. Duke Cunningham (R-Calif.) confessed to committing tax evasion and was sentenced to eight years and four months in federal prison and ordered to pay $1.8 million in restitution.
But some big names committed tax evasion and got away with it. In 1985, Joseph Alioto confessed that he paid no income taxes during the years he served as Mayor of San Francisco. He was never charged with tax evasion. In 2001, President Bill Clinton pardoned Marc Rich and his partner Pincus Green, both of whom were indicted by a U.S. Attorney on charges of tax fraud, among other charges. Rich avoided tax authorities for years until his death in 2013, while Green is reported to have retired in Switzerland on his $1.2 billion nest egg.
In 2008, Charles Rangel (D-N.Y.) tried to evade paying taxes on the sale of his villa in Punta Cana (in the Dominican Republic), but was exposed and forced to pay $11,000 in back taxes. The House of Representatives voted 333-79 to censure him, but Rangel never spent time behind bars.
Also in 2008, Sen. Ted Stevens (R-Alaska) was indicted for tax evasion, but his case was dismissed.
In 1900, 14 years before the IRS started collecting income taxes, Tax Freedom Day fell on January 22. And the take back then amounted to less than six percent of a worker’s total income. Patriots in 1776 didn’t like taxation without representation. They should see us now with representation!
The Tax Foundation: Tax Freedom Day 2019 is April 16th
The Motley Fool: A Foolish Take: Celebrating Tax Freedom Day
Answers.com: How many tax payers are in America?