You'll work 4 months just to pay taxes

By Scott McCredie

Get ready to bust out the champagne! In a few weeks we'll celebrate Tax Freedom Day, the made-up holiday after which Americans start working for themselves, not for the government.

By the fourth week of April, Americans will have earned enough to pay all of their federal, state and local tax obligations for the year, the Tax Foundation says.

Tax Freedom Day fell on April 23 in 2008, three days earlier than the recalculated date for 2007, but that's about par for the past four decades. The earlier date is due to a combination of the Bush administration's tax reductions and the stimulus tax cut enacted last year.

Hold it, critics say -- don't touch that cork. Some contend the media hoopla that surrounds Tax Freedom Day sends a cynical and misleading message to the public. The Tax Foundation, which calculates the date and promotes it each year, has a distinct and not particularly subtle political message: that Americans pay too much for government.

But if you don't live in Connecticut, things could have been worse. Residents of the Constitution State didn't see Tax Freedom Day until May 8. At the other end of the scale, Mississippi, Montana, West Virginia and Alabama all reached tax freedom by April 9. And because of its comparatively low state and local taxes, Alaska hit that day before the end of March.

The foundation, a tax research group based in Washington, D.C., was begun in the 1930s by a handful of corporate executives, including the chairman of General Motors and the president of Standard Oil of New Jersey. The foundation has tracked Tax Freedom Day since 1971, part of a continuing effort to make Americans more conscious of what they pay in taxes.

Government's take fairly constant

Federal income taxes take up about two-thirds of total tax spending, state and local taxes about a third. Since 1943, the number of days required to meet federal taxes has been roughly the same -- about 70. That means that the ratio between what the U.S. government taxes and what people earn has remained relatively unchanged across a dozen presidencies, three major wars, a cold war and a handful of recessions.

For the first 40 years of the 20^th century, state and local taxes were generally higher than federal taxes, and total taxes remained below 10% until the 1930s. That's when Franklin Roosevelt attacked the Great Depression with the New Deal, expanding the role of the federal government and expanding the taxes needed to pay for those programs. The costs of waging World War II swelled taxes even further in the 1940s.

Americans' total taxes, 5.9% in 1900, rose to about 30% by 1968 and remain there today, the Tax Foundation says.

The foundation bills itself as politically neutral. "We make no value judgment on whether (the tax rate) is too high or too low," says Curtis Dubay, an economist with the foundation. "That's for the voter to decide, whether they're getting good value for their money."

Tax Freedom Day, state by state:

State	Date	State	Date
Connecticut	May 8	Ohio	April 17
New Jersey	May 7	North Carolina	April 17
New York	May 5	Indiana	April 17
California	April 30	Arkansas	April 17
Washington	April 29	Michigan	April 16
Massachusetts	April 28	Oregon	April 16
Maryland	April 28	South Carolina	April 16
Minnesota	April 27	Iowa	April 16
Nevada	April 26	New Hampshire	April 15
Florida	April 26	Delaware	April 14
Hawaii	April 26	Missouri	April 14
Virginia	April 25	Louisiana	April 13
Rhode Island	April 24	North Dakota	April 12
Wisconsin	April 24	Texas	April 12
Illinois	April 23	South Dakota	April 12
Colorado	April 23	New Mexico	April 12
Pennsylvania	April 21	Tennessee	April 11
Utah	April 21	Oklahoma	April 11
Maine	April 20	Kentucky	April 10
Wyoming	April 20	Alabama	April 9
Arizona	April 20	West Virginia	April 8
Idaho	April 20	Montana	April 8
Vermont	April 19	Mississippi	April 7
Nebraska	April 19	Alaska	March 29
Georgia	April 19	District of Columbia	May 3

Source: Tax Foundation calculations based on U.S. Department of Commerce data

Continued: A battle over terms

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