Is it really Tax Freedom Day?
Blaming the Federal Government
It's tax time so it's no surprise that our local "newspaper" uses the day to rail against the federal government. Today's editorial, Federal Taxes Out of Control, tells us about the Tax Foundation findings on when we no longer work for the government.
Each year at about this time, coinciding with the April 15 deadline for most people to file income tax returns, the nonpartisan Tax Foundation releases figures on how much it costs Americans to pay for local, state and federal governments. The foundation announces dates for "Tax Freedom Day," the point during the year at which an average person has worked long enough to pay all his taxes. But in both our states, Tax Freedom Day comes later and later each year. Last year it was April 10 for West Virginians and April 14 for Ohioans.
Again, don't blame your local and state officials. They appear to have done a good job of limiting the damage to our bank accounts. The fault lies in Washington, which takes an ever-increasing bite out of our budgets.
According to the Tax Foundation, the average American will have to work until April 24 to cover his tax bill this year. In 2009, the date was April 10.
I've seen this type of statistic from the Tax Foundation before and so I decided to take a look at the editorial's characterization that the foundation was "nonpartisan." Here is Ed Dolon at EconoMonitor:
The foundation invites journalists to describe it as “a non-partisan research think tank, based in Washington, DC,” but not all agree. For example, Dan Crawford, writing for Angry Bear, says, “Its work is aimed at one purpose–convincing Americans that they pay too much in taxes and that government is too big.” Others point out contributions from the Koch Family foundations and ties to other conservative groups as signs of partisan bias. Paul Krugman says flat-out that “knowledgeable people don’t trust the Tax Foundation.”
Interesting. It would seem that they may be "nonpartisan" but they certainly don't appear to be non-political. What about their use of statistics? Here I found a couple of writers/economists who point to how they mislead with statistics. (For example, using "average" rather than "median" which greatly distorts the findings.) Tom Moran writes:
The Tax Foundation wants to sweep away all those subtleties in service to its ideological bottom line. That's not what a real think tank does. That's propaganda, pure and simple.
And here is Linda M. Beale who teaches taxes at Wayne State Law School explaining "why":
It seems likely that the primary purpose is to mislead ordinary Americans about the role of taxes and the amount of taxes they pay. The Tax Foundation gets my maximum "boo" for its shameless exploitation of statistics to mislead Americans about both their own tax burdens and the role of government in our lives.
Finally, I would note that the editorial tells us not to blame "your local and state officials" yet it doesn't give us any evidence or reason why we shouldn't. No, it's all the Federal government's, and by extension, Obama's fault. (Isn't everything?)
For some research into how much residents of each state pay in taxes check out the work done by wallethub.com. (See here for example.) They've been doing a number of interesting economic studies and so far I have not found any problems or major biases in their work - let me know if you see any.