According to Robert Carling and Oliver Hartwich the big day is tomorrow.
Every year, CIS economists look at the total tax bill at all levels of government – federal, state and local – and compare it with the total wealth Australians have created through economic activity. From this comparison, they calculate how many days of the year, beginning 1 January, Australians work to pay off their annual tax bill, assuming all they produce goes to the Australian Tax Office.
Tax Freedom Day marks the first day of the calendar year when the tax bill is cleared and taxpayers begin working for themselves rather than for the government.
It’s a bit earlier this year than in previous years.
This year, Tax Freedom Day is few days earlier than a decade ago, which should be good news. After all, it means Australians have had to work less than before for the government.
On closer inspection, however, the news is actually worrying, says Dr Hartwich. The earlier Tax Freedom Day is not the result government spending less but a fall in tax revenue as a result of the global financial crisis.
Last year, the federal and state governments ran deficits of $59 billion. But today’s borrowing is nothing but tomorrow’s taxes. Eventually, we will have to pay the deficits government is running today.
So for an honest assessment of the real Tax Freedom Day, the deficit should be included in the actual tax revenue. This means the Tax Freedom Day for 2012 will fall a whopping 15 days later, on 20 April, putting it back to where it was before the global financial crisis.
Government slavery ends 20 April.