Yesterday I read this article on Tax Freedom Day. According to the Tax Foundation it takes Americans 113 days to pay the nation’s taxes. That is, Americans pay an average 30.8% in taxes on their yearly wages. If you convert that to days, Americans work 113 days (assuming you work 365 days a year) out of the year just to pay the government their share of taxes. So on the 114th you are working for yourself, yeah break out the bubbly!!
Well, maybe don’t celebrate just yet. The Foundation applies the same logic to calculate the average number of days Americans spend working to pay for things such as food, shelter, clothing, etc. After all of these living expenses are taken into account only the money you earn for 44 days out of the year is yours to keep. What is not considered here is how many working days it takes to pay off debt.
So, with the national savings rate currently a negative number then in average Americans don’t have enough days in the year to work to pay off their debt. This year, are you working for yourself or your creditors?