Tax Foundation Figures Do Not Represent Typical Households’ Tax Burdens: Figures May Mislead Policymakers, Journalists, and the Public

Publication Date: March 2007

Publisher: Center on Budget and Policy Priorities (Washington, D.C.)

Author(s): Robert Greenstein; Aviva Aron-Dine

Research Area: Banking and finance

Keywords: Economic projections; Income diversity; Household income; Economic inequality

Type: Report

Abstract:

Each year, the Tax Foundation releases a report projecting “Tax Freedom Day,” which it describes as the day when “Americans will finally have earned enough money to pay off their total tax bill for the year.” Over the years, many pundits and policymakers have misinterpreted the Tax Foundation’s report as reflecting the tax burdens that the broad swath of middle-income families must shoulder. In fact, however, according to data from authoritative sources such as the nonpartisan Congressional Budget Office, middle-income Americans pay significantly less in taxes as a share of their income than the Tax Foundation’s report implies.