How much are you taxed?

Question

Okay play fair now. Take a guess then check out this link. Promise?
How much do you think the average american is taxed. That is. Til what day of the year do YOU work until all these taxes are paid up. (fees permits taxes etc.).
Guess a day (like january 12th or something)then read this. But tell me your guess. and be HONEST!

http://www.taxfoundation.org/taxfreedomday/

Answer 1

I did a rough calcualtion of fed income tax, state income tax, social security tax, property tax and sales tax. I pay about $12K in taxes for the year. I'm sure that I've missed some taxes, but I think that is a reasonable estimate.

Answer 2

These studies make for interesting reading but have little link to reality for most taxpayers. For instance, my total tax bite last year on a gross income of just over $125k (about half in long-term capital gains) works out to 23%. That includes income taxes, Social Security & Medicare taxes, real estate taxes, personal property taxes and a good estimate for sales taxes, gasoline taxes, and other fees that I paid. That pegs my personal "Tax Freedom Day" at about 10:48 PM on March 24th.

The problem with these studies is that they use the averages for all taxpayers. Many taxpayers pay little or no tax at all when various refundable credits such as the EIC and Additional Child Tax Credit are taken into consideration. Some even have a negative tax bill when all things are considered. The numbers are skewed by the small percentage of very wealthy taxpayers.

A much more meaningful presentation would break things out for a dozen or so semi-typical groups of taxpayers of various family size and incomes. Most "typical" taxpayers would probably be surprised at how much earlier their personal "Tax Freedom Day" would fall. For example, the bottom 50% of all wage earners pay around 4% of all taxes. That would peg "Tax Freedom Day" for half of the country at around January 15th.

Americans like to complain about high taxes but the truth is that US taxpayers have some of the lowest taxes in the industrialized world. Europeans pay as much as double in taxes what the typical US taxpayer does. Food for thought!