How Much Does Government Tax You?
by Tax Rascal
Categories: Economy, Featured, Personal Finance, Politics, Tax Policy, Uncategorized
How much of your paycheck will go to government in 2013?
The answer, of course, partly depends upon which state you live in, but the simplified answer can be stated this way: way too much!
Patrick Tyrrell at the Heritage Foundation has an excellent piece out that breaks down the approximate amount an average middle class single filer would pay in each state (see image to the right). Naturally we need to control for certain variables, but this thought experiment is nothing short of scary regardless of one’s personal situation.
The federal income tax for 2013 will be around 28%, depending on what happens with the fiscal cliff. Add to that the Social Security and Medicare payroll tax at 15.3% (projected 2013 rate) and we get an average federal individual tax burden of 43.3%.
Then we have to consider state taxes, which of course vary greatly from state to state. But on average state income taxes are set at a rate of 4.82% for a total state and federal tax burden of 48.12%!
And yet this isn’t even the end of it! Our analysis doesn’t include sale taxes, surtaxes on investment income and the slew of other taxes that require many Americans to hire special help to figure out. When you factor in all of these other taxes, government very quickly consumes over 50% of an individual’s income.
Unfortunately both Democrats and Republicans seem to be on the same page that the federal government will have to raise taxes in order to get its fiscal house in order. Maybe someone should point out to them that frankly, we’re taxed enough already.