At 39%, U.S. has highest corporate tax rate (federal plus state) in developed world. OECD average is 25%
No Freedom From Taxes this Fourth of July
This year on the Fourth of July, Americans will have a hard time celebrating their independence, as so much of the celebration is consumed by government. Between traveling over the extended weekend and stocking up on food and drinks for cookouts, Americans will spend a minimum of $2.6 billion. However, make sure there’s room for Uncle Sam on your picnic blanket: this year, 34.77 percent of the cost of celebrating the Fourth of July is made up of government taxes and fees.
Fourth of July spending is subject to income taxes, payroll taxes, corporate income taxes and other taxes on business activity. The government then includes additional fees, excise taxes and international tariffs, increasing the cost of celebrating the holiday. More than 88 percent of Americans will participate in some form of festivity and spending on the holiday is estimated to be $62.49 a person.
According to the National Retail Federation, 64.4 percent of the population attends cookouts on Independence Day. From hamburgers to condiments to watermelon, Americans will spend over $1.42 billion on food. While Americans celebrate the nation’s freedom from unfair taxation, Uncle Sam still manages to demand $17.35 from them in taxes on food.
In addition, taxation on food does not account for beverages, including beer and soda. In anticipation of celebrating during cookouts and fireworks, Americans spend $359.81 million on beer and $106.45 million on soft drinks. The government guzzles 44.33 percent of the cost of beer, siphoning off $159.50 million in revenues. Government also makes it more expensive to beat the heat with a refreshing soft drink – 27.98 percent of the cost of soda is thanks to government taxes.
This year, AAA projects that more that 42.3 million Americans will travel over 50 miles to celebrate the Fourth of July. Of the 35.5 million Americans traveling by car, the government will collect a minimum of $68.12 million in tax revenues on gasoline —44.52 percent of the price of a gallon of gas.
Similarly, over 3.2 million Americans will fly to their holiday destination. Considering the rate for the top 40 US air routes flights start around $200, a 44.77 percent tax incorporated into the price of the ticket means the government will collect a minimum of $280.13 million in tax revenue.
Whether you plan on catching candy at the parade or buying some sweets for your barbeque, remember the government taxes that too. Government bites off 30.81 percent of your lollipop…and that’s to say nothing of local officials across the country who have suggested regulations and bans on sweetened goods.
But the nanny state intrusion into Fourth of July doesn’t end there – the most anticipated part of the holiday celebration, fireworks, is coming under the ire of paternalist officials in some states. It is estimated that Americans spend over $660 million on fireworks each year. While few states have taxes and fees specifically placed on fireworks, Alabama, Texas, West Virginia and Indiana have all taken strides towards taking the “independence” out of Independence Day. Alabama and Texas place an 8 percent and 2 percent tax, respectively, on the sale of fireworks, while West Virginia has a “Sparkler and Novelty Registration Fee” on certain fireworks. Indiana requires a $2 license for families to set off fireworks.
Independence Day represents America’s freedom from onerous government, but Fourth of July is no tax holiday. In fact, with government making up over a third of the cost of the celebration, it seems Uncle Sam is leading the parade towards bigger government.