An Expensive Year for Government
The Cost of Government Center (CGC) is part of the Americans for Tax Reform Foundation, a non-profit group that promotes flatter, simpler and lower taxes across the US. CGC releases an annual report that examines the widespread cost of government, both national and local. The Cost of Government Day is the day on which a median-income earner has successfully earned enough money to pay their portion of the government (national, state and local) spending for the year. By calculating a particular day, CGC is able to demonstrate exactly how much the government spends in a simple and easily relatable fashion. If everyone paid for all of government spending, the average American would have worked for the government until July 15th in 2012 before they could keep any money themselves. 2012 marks the fourth consecutive year that the Cost of Government day has occurred during the month of July.
The study found that for the Cost of Government Day 2012:
- 87.82 days are spent working for federal spending,
- 40.04 days are spent working for state and local spending,
- 44.62 days are spent working for federal regulations, and
- 24.75 days are worked paying for state and local regulations.
The report examines each state to determine how many days are needed to pay off their spending for 2012. The ranking of state spending mirrors (nearly exactly) the Tax Foundation’s analysis of relative tax burden across the states. Generally, states that have the greatest tax burden also happen to be the states that spend the most per capita and end up with the latest Cost of Government Day.
Since 2001, states that have a higher overall tax burden have faced increased levels of out-migration as residents move to states with less of a tax burden. When comparing states with the highest tax burden to those with the lowest tax burden, CGC found that those with the lowest tax burden gained both more taxpayers and more income, while states with the highest tax burden lost more taxpayers and income. These results, consistent with findings in ALEC’s Rich States Poor States, show that people continue to vote with their feet to states with lower taxes and better business climates.