There aren’t many positives to this deep recession, but here’s one: It took eight fewer days this year for Arizonans to work off their tax burden, an interest group says.
You won’t receive a notice in the mail, but Friday was Tax Freedom Day in Arizona as determined by the Tax Foundation, a nonpartisan group that educates about tax policy. That’s the day when the average person has earned enough to cover federal, state, payroll, property, sales and other taxes for 2009.
But even what sounds like good news is more lemons than lemonade, according to Josh Barro, a staff economist with the Tax Foundation. The sorry economy and the federal stimulus are the main reasons Tax Freedom Day came earlier this year.
“The government is not collecting as much taxes and is spending more than ever to try to revitalize the economy,” Barro said in a telephone interview from the group’s headquarters in Washington, D.C. “We’re not paying for it this year, but we’ll have to pay for it eventually.”
Barro noted that the Obama administration’s stimulus package includes temporary tax cuts that will mean slightly larger paychecks for most Americans.
The group determined that national Tax Freedom Day falls on Monday. Arizona’s is earlier because it has a relatively low state and local tax burden, Barro said.
Alaska had the earliest Tax Freedom Day: March 23. Connecticut has the latest: April 30.
The group’s Tax Freedom Day calculation doesn’t factor in the effects of the federal budget deficit, which this year is pushing $1.5 trillion. Doing so would produce a date of May 29, which is by far the latest it has fallen in the post-World War II era, the Tax Foundation said.
Waiting for a bus in downtown Phoenix, Cherri Thunder, who works as a waitress, was happy to hear that Tax Freedom Day had arrived early.
“The earlier we get rid of our taxes, the better,” she said. “I don’t like taxes; I think they’re a waste of people’s hard-earned money.”
But Tom Jenney, Arizona director of Americans for Prosperity, an interest group dedicated to free markets and limited government, suggested that Thunder’s happiness will be short-lived. He pointed to the Obama administration’s push for a cap-and-trade system to reduce greenhouse-gas emissions, which he said would amount to a tax increase passed on to consumers.
“This is the calm before the storm,” Jenney said.
Stephen Happel, an Arizona State University economics professor, said the national debt taken on to address the economic crisis is an obligation that taxpayers are going to face sooner or later. And an earlier date for Tax Freedom Day doesn’t really point to better times, he added.