Tuesday, April 14, 2009

Expenditure Freedom Day

"Tax Freedom Day" was a lame political stunt at the best of times but its shallowness has been exposed this year. The claim of the Tax Foundation is that the designated date each year represents the first day of the year that the fruits of average income are not going to the government, if you assume that the first claim on each year's income flow goes to the total tax burden. It's essentially just the overall tax burden as a share of the economy times 365. That's the number of days per year you're working for the gummint.

It's intrinsically flawed. The long-term tax burden is determined by the level of government spending, not the level of taxes. George W. Bush managed to make tax freedom day earlier because he was borrowing to pay for so much of his extra spending --even though that borrowing represents future taxes. But in a bit of poetic justice, Barack Obama, $2 trillion deficit and all, has also gotten an earlier Tax Freedom Day. So what are those tea party types whingeing about? One wonders if the Tax Foundation will suddenly realize that the concept needs to be adjusted, or would that be too brazen?

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