- The Washington Times - Monday, April 17, 2000

If taxes are the price once pays for civilization, as has been said, then this country ought to be more civilized than ever. The Tax Foundation is out with its annual report on "Tax Freedom Day," and the bad news is that Americans are now working longer than ever for government at all levels.

Tax Freedom Day 2000, the day on which taxpayers pay off the equivalent of their obligations to various governments, doesn't arrive until May 3. That's 124 days into the year before, in effect, Americans can start spending their earnings on their own needs. That's up from April 20 in 1992, just eight short years ago. Not since the Vietnam War and Lyndon Johnson's "Great Society" spend-a-thon has freedom from taxes been postponed so long in so short a period. The result is that on average, Americans will spend more time working to pay their taxes than they will working to pay for food, clothing and shelter combined.

The problem is even worse for some local residents, whose states also have relatively high tax rates. Although Connecticut actually tops the list of taxing states Tax Freedom Day doesn't arrive there until May 18 the District of Columbia is right behind at May 17. Maryland follows at May 4, one day longer than the nation as a whole. Virginia lags behind at April 28. A host of states Oklahoma, Tennessee, Kentucky, Alabama and Mississippi bring up the rear at April 23. For residents of these states, finishing last has its rewards.

The reason for the increase? In part, it's the rising burden of the federal payroll tax. The rate hasn't changed since 1990 15.3 percent but the amount of wages subject to the tax has risen sharply. In 1975, just $14,100 was subject to the tax. By 1998, the figure had risen to $68,400. The payroll tax also produces the odd situation in which economic expansion turns out to fill government coffers more quickly than wage earners' pockets. The reason is that payroll taxes stripped from paychecks even before employees receive them go to the IRS decades before employees collect benefits from the government as retirees. That's assuming that they live long enough to collect; if they don't, survivors are out the payroll taxes the deceased paid in.

The Tax Foundation's findings aren't uniformly unwelcome. In March the group reported that for one slice of American demographics, the percentage of the total tax burden on the median two-income family ($68,605) actually dipped just slightly from 40.9 percent in 1997 to 39 percent in 1998 (the latest year for which data are available). Give the Republican-controlled Congress some credit for passing the Taxpayer Relief Act of 1997. Explains the foundation, "The almost two percent decline in the two-earner family's total tax burden between 1997 and 1998 can be attributed almost entirely to this legislation. It brought such substantial tax relief to the median family because its new tax credits, the Per-Child Tax Credit and the Hope and Lifetime Learning Education Credits, are especially valuable to the demographic group that the median family falls into."

Ideally, federal lawmakers wouldn't play favorites with different demographic groups. Ideally, they would cut taxes across the board and speed up the day when Americans can stop working for the government and start working for themselves.

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