Tax Freedom Day

• Key point:Tax Foundation, Inc., recently announced that May 5 was "tax freedom day" for 1994 (up from May 3 in 1993).

Tax freedom day is the day on which taxpayers stop working to pay federal, state, and local taxes and begin working for themselves. Stated differently, the average taxpayer will work 126 days in 1994, or 2 hours and 45 minutes each day, to pay federal, state, and local tax bills. Tax freedom day was February 13 in 1930 and April 28 in 1970. This year's tax freedom date is a national average. The actual tax freedom day varies from state-to-state, because of variations in state taxes. For example, tax freedom day is May 28 in New York (the latest date in the nation), and April 22 in Alabama (the earliest date in the nation). Tax Foundation, Inc. predicted that the passage of a national health care program by Congress could push tax freedom day into June.