Delawareans Work Longer to Pay “The Man”

For Immediate Release: Monday, April 16, 2011
For More Information, Contact: Joe Fulgham, (302) 744-4184

One hundred and seven days* – that is how long the average Delawarean will work to pay their federal, state and local taxes this year. “If you were to add up all the tax obligations of our residents, all the money they’ve earned since the start of the year into tomorrow would be needed to satisfy that burden,” said State Rep. Deborah Hudson, R-Fairthorne, a member of the House Finance Committee. “The good news is that Delaware’s Tax Freedom Day is Tuesday (4/17),” Rep. Hudson said. “At some point on the 17th, our citizens will stop working for government and start working for themselves.” The Tax Foundation – a Washington, D.C. based non-partisan research group – calculates Tax Freedom Day annually for each state and the nation as a whole using income and tax data reported by government agencies. “Americans now pay more in taxes than they spend on food, clothing and housing combined,” said Tax Foundation economist Dr. William McBride. The tax burden placed on Delawareans is the 17th highest in the nation, tied with Idaho and Utah, and four spots higher than last year’s ranking. “There are 31 states that celebrated their Tax Freedom Day before we did this year,” Rep. Hudson said. Tennessee had the earliest Tax Freedom Day on March 31st, followed by Louisiana and Mississippi the next day. The highest three states for taxation were Connecticut, which does not have its Tax Freedom Day until May 5th, New Jersey and New York. “It should concern Delaware residents that we’re a lot closer to the top of this list than the bottom,” Rep. Hudson said. A member of the Delaware Financial Advisory Council, which is responsible for estimating state revenue, Rep. Hudson noted that state spending continues to increase while major revenue sources, like the corporate franchise tax and slot machine proceeds, are falling or flat. Over the last 10 years, Delaware’s operating budget has grown by more than $1.206 billion – a 52.4 percent increase over the FY 2002 budget. Delaware’s Tax Freedom Day falls on the same day as Tax Freedom Day for the nation. “That is four days later than last year and a full week later than it was in 2009,” Dr. McBride said. However, Dr. McBride notes the national Tax Freedom Day is something of an illusion because of the federal government’s deficit spending. “In order to pay for all spending in the current year, the [federal] government would need to raise an additional $1.014 trillion in taxes, pushing Tax Freedom Day to May 14th,” he said. Overall, Dr. McBride says Americans will pay $2.62 trillion in federal taxes and $1.42 trillion in state and local taxes out of $13.86 trillion in income, for a combined tax rate of 29.2 percent.### * - Tax Foundation calculations do not include Leap Day so as to provide comparability of figures with those in previous reports.