Tax Freedom Day: What Taxpayers Need to Know About Tax Freedom Day

The Tax Foundation reports that on April 24, 2015, Tax Freedom Day, the nation as a whole will have earned enough money to pay its federal, state and local tax bill for the year.

It is an important date for taxpayers and lawmakers because it represents how long Americans, collectively, have to work in order to pay the nation's tax burden.

"Tax Freedom Day takes all federal, state, and local taxes and divides them by the nation's income. In 2015, Americans will pay $3.28 trillion in federal taxes and $1.57 trillion in state and local taxes, for a total tax bill of $4.85 trillion, or 31 percent of national income," the Tax Foundation said on their website.

What sets this year apart from past Tax Freedom Days is that in 2015, Americans will "work the longest to pay federal, state, and local individual income taxes (43 days)."

Each year, the date for Tax Freedom Day has fluctuated. In 2000, the Tax Freedom Day fell on May 1 and Americans paid 33 percent of their collective incomes toward taxes. In 1900, Tax Freedom Day fell on Jan. 22 and Americans paid only 5.9 percent of collective income to cover the tax bill, according to the Tax Foundation report.

Tax Freedom Day arrives on different dates for different states. National Tax Freedom Day arrives nine days after the tax filing deadline of April 15, but arrives earliest for Louisiana on April 2, followed by Mississippi on April 4. Connecticut and New Jersey will have their Tax Freedom Day on May 13. The map below shows each state's Tax Freedom Day.

"Tax Freedom Day gives us a vivid representation of how much we pay for the goods and services provided by governments at all levels," said Tax Foundation Economist Kyle Pomerleau. "Arguments can be made that the tax bill is too high or too low, but in order to have an honest discussion, it's important for taxpayers to understand cost of government. Tax Freedom Day helps people relate to that cost."

In January, the White House published a Fact Sheet titled "A Simpler, Fairer Tax Code That Responsibly Invests in Middle Class Families," which noted that unfair loopholes for the wealthy and corporations placed too much tax burden on middle class families.

In response, President Barack Obama held a State of the Union address to propose tax reform to benefit the middle class.