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Saturday, April 11, 2009

'Tax Freedom Day' arrives Monday


Americans need 103 days to earn enough to pay 2009 taxes, according to one group.

Thanks to the recession, "Tax Freedom Day" arrives a little early this year.

That means Americans will have to work 103 days from January 1 before they have earned enough to pay their taxes for 2009, according to the Tax Foundation, a tax education group. Everything after that is theoretically theirs to keep.

April 13 is the earliest date since 1967, said the report. That's eight days earlier than 2008's Tax Freedom Day, and a full two weeks earlier than 2007's.

The report cited two reasons for the shift to an earlier date: The recession has reduced tax collections faster than it has reduced income; plus, the Obama administration's stimulus package includes large temporary tax cuts for 2009 and 2010.

Most of the stimulus package's tax cuts continue through 2010, so Tax Freedom Day will shift later next year only if the economy improves, the report said.

Americans will pay more in taxes in 2009, according to the report, than they will spend on food, clothing and housing combined

State-by-state: Alaska has the lowest average tax burden in 2009 because of lower incomes and an extremely low state-and-local tax burden, the report said. Alaska's Tax Freedom Day was March 23.

Louisiana, Mississippi, South Dakota and West Virginia follow.

Connecticut residents "will celebrate last, as usual," the report said, working until April 30 before earning enough to pay their full tax obligations. That's because Connecticut's residents pay "extraordinarily high" federal income taxes, according to the report.

New Jersey, New York, California and Maryland round out the top five latest states.



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