Thursday, April 8, 2010

Goldwater Institute Spreads Bullshit About Tax Freedom Day

Posted By on Thu, Apr 8, 2010 at 10:14 AM


The Goldwater Institute is crowing about how Easter Sunday was "Tax Freedom Day" in Arizona:

Tax Freedom Day for Arizona this year was Easter Sunday. According to the Tax Foundation, that’s the day by which Arizonans have earned enough money to pay their total 2010 tax burden. After 94 days or 26 percent of the year has passed, the average Arizonan finally gets to work for himself!

The only problem: Tax Freedom Day came a long time ago for the "average Arizonan."

Because of the progressive income-tax structure, the entire premise of Tax Freedom Day is flawed—and Goldwater's Byron Schlomach is smart enough to know that he's passing along a big stinky load of horseshit.

Sharon Ward at the Pennsylvania Budget and Policy Center explains the big math mistake here:

The Foundation generates an estimate of average tax burden for Americans and for residents of each state. The Chairman of Comcast and the mailroom clerk do not have the same income, but the Foundation assumes that to be the case in assigning a tax freedom date for all Pennsylvania taxpayers.

The Center on Budget and Policy Priorities, using Congressional Budget Office analysis of taxpayers in 2006, finds that the Tax Foundation overstates federal taxes for 80% of taxpayers. That year, the Tax Foundation

assumed an effective federal tax rate of 21% in its Tax Freedom calculation, which is higher than the rate paid by all but the top 20% of earners. The lowest 20% of taxpayers nationally paid 4.3% of their income in federal taxes and taxpayers in the middle paid 14.2% in federal taxes. Only the top 20% of taxpayers (people who earn $142,000 after deductions and exclusions) are paying 21% or more of their income in federal taxes.

It's not unusual for Goldwater to skew its numbers to back up its point. Blogger David Safier at has nailed them on their phony estimate that there's one bureaucrat for every teacher in Arizona's public schools. It's only true if you consider bus drivers and janitors to be bureaucrats.

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