Arizonans collectively face a lighter combined tax bill than most Americans, requiring 105 days this year to pay all federal, state and local levies, compared to 114 days for Americans overall, according to a new report.
The annual study from the Tax Foundation indicates “tax freedom day” arrives April 15 in Arizona compared to April 24 for the nation overall. This measure, which ignores leap years, shows how long it would take to pay all federal, state and local taxes on average, assuming people paid all taxes each year before other expenses. The study also apportions a share of corporate income and other taxes to the various states.
The light tax burden for Arizona is partly a function of modest personal income tax rates and residential property-tax rates here, but it also reflects low personal incomes. Arizona ranks 42nd for per capita income at around $39,100, according to the Bureau of Economic Analysis.
In fact, most states with light tax burdens also score low in personal incomes, while residents of richer states pay the highest combined taxes.
For example, tax freedom day arrived earliest this year in Mississippi, on April 5, and will come last to Connecticut on May 21, according to the Washington, D.C.-based Tax Foundation. According to the BEA report, personal incomes averaged just under $67,000 in the wealthiest state, Connecticut. That was nearly double the $35,400 average for last-place Mississippi.
Nationally, tax freedom day is one day earlier this year, which the Tax Foundation said reflects federal changes late last year that made several business and individual tax breaks permanent.
“Arguments can be made that the tax bill is too high or too low, but in order to have an honest discussion, it’s important for taxpayers to understand the cost of government,” said Scott Greenberg, a Tax Foundation analyst, in a statement. “Tax Freedom Day helps people relate to that cost.”
Expressed another way, the report said Americans work about 46 days to pay federal, state and (in some cases) local income taxes, 26 days for Social Security and other payroll taxes, 15 days for sales and excise taxes, 11 days for property taxes, nine days for corporate income taxes and the remaining seven days for all other levies.
Over the last century or so, the latest national tax freedom day came May 1, 2000, while the earliest arrived Jan. 22, 1900.
