April 15, income tax day, is upon us again, and it calls to mind to two other notable days. The first is Tax Freedom Day. Estimated each year by the Tax Foundation, this is the day of the year when Americans are "free" of the burden of taxation, assuming that every penny of income earned before that date was used to pay taxes (Federal, state, and local combined).

This year Tax Freedom Day is April 29. This is two days later than last year, as shown in the chart below. Looking further back, the changes in Tax Freedom Day tell the following story: the burden of government rose throughout the 1990s, decreased early in the 2000's, and has been edging up since 2003.

But as Milton Friedman liked to point out, when it comes to the size of government, it's not how much governments collect in tax revenue that matters most. It's how much they spend. If you cut taxes by half but don't reduce spending, you haven't done anything to shrink the size of government. All you've done is shift the burden of paying for it to future generations.

A few years ago, AIER began to estimate what we call "Friedman Day" -- the day of the year when Americans earn enough money to pay for government spending. Friedman Day falls later than Tax Freedom Day, because it includes more than the taxes you pay. It also includes the money the government borrows to pay for all the additional spending that isn't covered by tax revenue.

Friedman Day tells a different story. It shows that the burden of government fell from 1992 to 2000. It surged in the early 2000's because, even though tax revenues fell sharply, spending surged, and the government borrowed more to make up the difference. Tax Freedom Day shows that Americans are working fewer days to pay their taxes now than they did in 2000. Friedman Day shows that it is not because the government is spending less, but because it is borrowing more, in the name of tomorrow's taxpayers.

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