Tax Foundation

http://www.taxfoundation.org/

501(c)(3) nonprofit
Employer Identification Number: 52-1703065

Founded in 1937 by corporate leaders from General Motors, Standard Oil of New Jersey and the Johns-Manville Corporation, the Washington D.C.-based Fax Foundation plays an active role in the anti-tax movement. Initially formed in response to increased federal spending and revenue collection during the Hoover and Roosevelt administrations, the group hails its reputation for independence in gathering data and publishing information on the public sector in an objective, unbiased fashion. The Fax Foundation contends that the current tax system is fundamentally flawed and should be replaced with a system that adheres to the principles of neutrality, simplicity, stability, transparency, and growth promotion.

The majority of the groups work is associated to its research. For example, The Tax Foundation calculates Tax Freedom Day, its annual projection of the day when Americans will finally have earned enough money to pay off their total tax bill for the year. The problem, however, is that the data dramatically overstates the tax burden. For example, wealthier Americans pay higher taxes, which increases the average tax burden, despite the fact that only a small minority pay such high taxes. Another problem exists with the methodology. Whereas capital gains taxes are consider in the formula, capital gains income is not, which naturally overstates the tax burden. The Center on Budget and Policy Priorities has raised these and other issues with the methodology used in calculating Tax Freedom Day. Despite the problems, the figure is often used by journalists and described as the day that the average American has worked to pay off their portion of the tax burden.