# Average Total Taxes? **URL:** \ **Category:** Great Debates\ **Created:** [January 5, 2012, 7:57am UTC](https://boards.straightdope.com/t/average-total-taxes/608479 "2012-01-05T07:57:10Z")\ **Posts on this page:** 20\ **Page:** 4
**Author:** ![sbright33](https://avatars.discourse-cdn.com/v4/letter/s/8e8cbc/32.png) [@sbright33](https://boards.straightdope.com/u/sbright33)\ **Post date:** [January 5, 2012, 8:35pm UTC](https://boards.straightdope.com/t/average-total-taxes/608479/61 "2012-01-05T20:35:26Z")
I was trying to find a link or reference that shows the Earned income = about Gross income (interest, dividends, cap gains/losses) when you add it up for every citizen. Can anyone help me? It is not easy. ---
**Author:** ![sbright33](https://avatars.discourse-cdn.com/v4/letter/s/8e8cbc/32.png) [@sbright33](https://boards.straightdope.com/u/sbright33)\ **Post date:** [January 5, 2012, 8:37pm UTC](https://boards.straightdope.com/t/average-total-taxes/608479/62 "2012-01-05T20:37:55Z")
> [@](#): > > When you respond to a specific point or specific post I was responding to all that Blinkingduck said, not a specific post. > [@](#): > > I agree with all that! That’s why I used the word “all”. ---
**Author:** ![sbright33](https://avatars.discourse-cdn.com/v4/letter/s/8e8cbc/32.png) [@sbright33](https://boards.straightdope.com/u/sbright33)\ **Post date:** [January 5, 2012, 8:55pm UTC](https://boards.straightdope.com/t/average-total-taxes/608479/63 "2012-01-05T20:55:58Z")
Let’s define “tax” as anything we pay to the government, without a choice, to get a benefit. Even if we enjoy the benefit or activity or process or object. ---
**Author:** ![sbright33](https://avatars.discourse-cdn.com/v4/letter/s/8e8cbc/32.png) [@sbright33](https://boards.straightdope.com/u/sbright33)\ **Post date:** [January 5, 2012, 9:01pm UTC](https://boards.straightdope.com/t/average-total-taxes/608479/64 "2012-01-05T21:01:40Z")
If 1/2 of all the people pay little tax, then the other half must pay about $32,000/yr to pay for government spending in 2007, which is about $16k per capita. Assuming no borrowing. Big assumption, which of course is wrong. 1st grade math. ---
**Author:** ![sbright33](https://avatars.discourse-cdn.com/v4/letter/s/8e8cbc/32.png) [@sbright33](https://boards.straightdope.com/u/sbright33)\ **Post date:** [January 5, 2012, 9:05pm UTC](https://boards.straightdope.com/t/average-total-taxes/608479/65 "2012-01-05T21:05:39Z")
> [@](#): > > Social Security is an easy first one, as it’s supposed to balance out on average, but that’s been noted. > Permit and license fees are a good one, starting with nigh-compulsory ones (drivers license renewal fee), and on to more optional ones (fishing license fee). > Tolls are great, because sometimes they are supposed to only exactly recoup the cost of the road/bridge, and sometimes they don’t cover anywhere near the cost, and sometimes they’ve paid of the original bridge/road and are now paying for other transportation actions. Does a toll become a tax the instant the original costs of the bridge/road are paid off? (Wait, what about maintenance?) > I suppose public transit fares are pretty similar. Though we don’t have to worry about whether they’re paying for something else; they almost never cover the entire cost of public transit (before you get outraged, does the street you live on charge tolls to cover its cost or is it more subsidized than public transit?). > How about things like airport landing fees, you know the weird little charges always added to your plane tickets? > Some places have municipally owned utilities, such as drinking water, or even broadband in a few places. Are the bills from the utility taxes? And financially some towns treat storm drains much like toilet sewers, and charge a fee for anyone hooked up, rather than paying for maintenance out of general revenues. Is the storm drain fee a tax? > Are parking and speeding tickets taxes? Does it matter whether the town is really trying to increase safety/available parking, or is just running a speed trap to get revenue? > I’m pretty sure nobody really thinks overdue book fees are taxes, but you know, there are people who might make that argument… > One thing that I think is pretty clearly a tax, but often neglected is import tariffs and the like. @Quercus- Some of the things on your list are too small, as a percentage, to bother considering. What are the big ones we should question? ---
**Author:** ![BlinkingDuck](https://avatars.discourse-cdn.com/v4/letter/b/eada6e/32.png) [@BlinkingDuck](https://boards.straightdope.com/u/BlinkingDuck)\ **Post date:** [January 5, 2012, 9:08pm UTC](https://boards.straightdope.com/t/average-total-taxes/608479/66 "2012-01-05T21:08:16Z")
> [@sbright33](#): > > @Blinkingduck - I agree with all that! If I WAS trying to make a point, you have made it for me very succinctly. Thanks! However, to be clear, I was not being facetious about saying I wasn’t complaining and was admiring…I really mean it. Think about it. The government (all levels, not a monolithic agency) is ingenious about taxing all parts of life. You are poor but working? Social security, sales and property taxes for you. Middle class…get hit by all but not very hard though property taxes bite more maybe. Higher income? Income tax. People who have savings regardless of income? Inflation and taxing losses as gains. People of all incomes and savings really are hit about the same percentage-wise methinks. It is a marvel. ---
**Author:** ![Ravenman](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/ravenman/32/2929_2.png) [@Ravenman](https://boards.straightdope.com/u/Ravenman)\ **Post date:** [January 5, 2012, 9:11pm UTC](https://boards.straightdope.com/t/average-total-taxes/608479/67 "2012-01-05T21:11:43Z")
> [@BlinkingDuck](#): > > Maybe a house example would work. > > Say you bought a house for $100,000. Inflation runs 10% a year but your house increases in value the same amount. > > So you have your house for 7 years or so…enough for inflation to make your house $200,000. > > You need to move …so you want to buy a house across town that now costs…$200,000. Basically the same house you have now. > > You sell…and are taxed on your $100,000 ‘gains’…say at 20%. > > You now have $180,000 which is not enough to get your house. > > The government just taxed you on…nothing. > > GENIUS! > > I know they now except homes from this…but probably only because it is so blatently obvious what is happening on such an infrequent and large purchase. I think you’re making up your own tax code. For a single person, the IRS does not tax you on the first $250,000 of capital gain on a home sale. It’s doubled for married couples. ---
**Author:** ![sbright33](https://avatars.discourse-cdn.com/v4/letter/s/8e8cbc/32.png) [@sbright33](https://boards.straightdope.com/u/sbright33)\ **Post date:** [January 5, 2012, 9:25pm UTC](https://boards.straightdope.com/t/average-total-taxes/608479/68 "2012-01-05T21:25:59Z")
> [@Ravenman](#): > > I think you’re making up your own tax code. For a single person, the IRS does not tax you on the first $250,000 of capital gain on a home sale. It’s doubled for married couples. He’s simplifying to make it easy to understand. Sometimes we do this incorrectly. What about the second time? What about if there’s time between the sale and purchase? Maybe a year. I think you get his point. ---
**Author:** ![BlinkingDuck](https://avatars.discourse-cdn.com/v4/letter/b/eada6e/32.png) [@BlinkingDuck](https://boards.straightdope.com/u/BlinkingDuck)\ **Post date:** [January 5, 2012, 9:27pm UTC](https://boards.straightdope.com/t/average-total-taxes/608479/69 "2012-01-05T21:27:57Z")
> [@Ravenman](#): > > I think you’re making up your own tax code. For a single person, the IRS does not tax you on the first $250,000 of capital gain on a home sale. It’s doubled for married couples. Heaven forbid that you read every word or extrapolate from an example! ---
**Author:** ![sbright33](https://avatars.discourse-cdn.com/v4/letter/s/8e8cbc/32.png) [@sbright33](https://boards.straightdope.com/u/sbright33)\ **Post date:** [January 5, 2012, 9:32pm UTC](https://boards.straightdope.com/t/average-total-taxes/608479/70 "2012-01-05T21:32:13Z")
@Blinkingduck- Your theory might make my number easier to calculate. If it’s roughly the same for everyone. I wish we knew the answer. I think you’re right about the distribution! An excellent way to maximize returns. It’s a beautiful scam. ---
**Author:** ![Euphonious\_Polemic](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/euphonious_polemic/32/3002_2.png) [@Euphonious\_Polemic](https://boards.straightdope.com/u/Euphonious_Polemic)\ **Post date:** [January 5, 2012, 10:04pm UTC](https://boards.straightdope.com/t/average-total-taxes/608479/71 "2012-01-05T22:04:32Z")
> [@sbright33](#): > > @leaffen - OK every tax is included in your 28%. But how about the other “Taxes”. This made me laugh; “OK your cite talks about taxes, but what about “taxes”?” This is just silly. The Tax Freedom day cite was also interesting if you look at the chart of tax Freedom days since 1900. Except for two years (2009, 2010),you’d have to go all the way back to 1960 to get a “better” or earlier tax freedom day (and that only by one whole day!). You have to go all the way back to 1950 to get any significantly better (ie lower) amount of total taxes. And of course, the US seems to have the 2nd least amount of total taxes paid by people (2nd to India) So why do people continue to bitch about how much they pay in taxes in the United States? This is the continuing mystery to me. ---
**Author:** ![Dag\_Otto](https://avatars.discourse-cdn.com/v4/letter/d/439d5e/32.png) [@Dag\_Otto](https://boards.straightdope.com/u/Dag_Otto)\ **Post date:** [January 5, 2012, 10:11pm UTC](https://boards.straightdope.com/t/average-total-taxes/608479/72 "2012-01-05T22:11:55Z")
> [@Euphonious\_Polemic](#): > > So why do people continue to bitch about how much they pay in taxes in the United States? This is the continuing mystery to me. Because they can spend hundreds of hours studying this and still not know a damn thing. ---
**Author:** ![sbright33](https://avatars.discourse-cdn.com/v4/letter/s/8e8cbc/32.png) [@sbright33](https://boards.straightdope.com/u/sbright33)\ **Post date:** [January 5, 2012, 10:59pm UTC](https://boards.straightdope.com/t/average-total-taxes/608479/73 "2012-01-05T22:59:28Z")
I’m not bitching. I’m trying to understand. 3% or even 9% is just plain wrong. 28% does not include all the payments we make to the government. 24% is the total FEDERAL income tax / total earned income. Why is the total tax, not just income tax, such a secret? Anyone? If this forum can’t answer it, nobody can… ---
**Author:** ![sbright33](https://avatars.discourse-cdn.com/v4/letter/s/8e8cbc/32.png) [@sbright33](https://boards.straightdope.com/u/sbright33)\ **Post date:** [January 5, 2012, 11:07pm UTC](https://boards.straightdope.com/t/average-total-taxes/608479/74 "2012-01-05T23:07:01Z")
What bothers me is that most people think it’s so low. One of the lowest countries. 2nd lowest beside India. Lowest since 1950. 3%??? It’s simply not true. We’re not taking into account the other taxes. Or payments made to the government. They are as big as income tax, which is close to, approximately 24% for most people I know. Then add 15% for SS if you pay it. Depending on how you look at that. ---
**Author:** ![dracoi](https://avatars.discourse-cdn.com/v4/letter/d/90db22/32.png) [@dracoi](https://boards.straightdope.com/u/dracoi)\ **Post date:** [January 5, 2012, 11:16pm UTC](https://boards.straightdope.com/t/average-total-taxes/608479/75 "2012-01-05T23:16:40Z")
> [@sbright33](#): > > @dracoi- Interesting! As a whole corporate income tax is about 1/3 personal. Or 1/4 the total of the 2. Do you have employees? Not everyone has their own business. You’re paying about 24k? You’re doing more than your share of paying what the government spent in 2007 at least. From reading your Post I cannot tell what your earned income was. Including your business? You said personal earned income is $52k. It’s complicated. I’m afraid most people are complicated. I wish we could look at a simpler case. Every case is complicated in some way. It’s why I have a job. The best answers you can get for an “average” case have already been provided by other posters in their links. A couple clarifications: There is no corporate income tax in my scenario. My company is an S Corporation, so income flows through to my personal return and I pay tax on it there; you can’t separate my personal tax from the company’s tax. My state also has no income tax because of the B&O (a gross receipts tax) Earned income, as defined by the IRS is unequivocally $52,000. I gave you some other numbers because I don’t think the IRS’s definition is what you really wanted. I do have employees and the company’s share of payroll tax is in the business taxes. I did a return for one of them (part-time help), and their annual tax burden (from all tax sources) would have been about -4% (yes, that’s negative 4 percent) after Earned Income Credits and Child Tax Credits. ---
**Author:** ![Dewey\_Finn](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/dewey_finn/32/4222_2.png) [@Dewey\_Finn](https://boards.straightdope.com/u/Dewey_Finn)\ **Post date:** [January 5, 2012, 11:27pm UTC](https://boards.straightdope.com/t/average-total-taxes/608479/76 "2012-01-05T23:27:25Z")
> [@sbright33](#): > > I’m not bitching. I’m trying to understand. 3% or even 9% is just plain wrong. 28% does not include all the payments we make to the government. 24% is the total FEDERAL income tax / total earned income. Why is the total tax, not just income tax, such a secret? Anyone? If this forum can’t answer it, nobody can… Various cites have been provided, such as the Tax Freedom Day website which pegs the number at about 28% and which says, “Tax Freedom Day is calculated by dividing the official government tally of all taxes collected in each year by the official government tally of all income earned in each year.” The fact that you don’t believe these numbers does not mean that they are incorrect. I’m not sure why this thread remains open or in GQ. ---
**Author:** ![Euphonious\_Polemic](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/euphonious_polemic/32/3002_2.png) [@Euphonious\_Polemic](https://boards.straightdope.com/u/Euphonious_Polemic)\ **Post date:** [January 5, 2012, 11:34pm UTC](https://boards.straightdope.com/t/average-total-taxes/608479/77 "2012-01-05T23:34:49Z")
> [@sbright33](#): > > What bothers me is that most people think it’s so low. One of the lowest countries. 2nd lowest beside India. Lowest since 1950. > > 3%??? > > It’s simply not true. We’re not taking into account the other taxes. Or payments made to the government. They are as big as income tax, which is close to, approximately 24% for most people I know. Then add 15% for SS if you pay it. Depending on how you look at that. You seem to be confused about the total taxes that the average person pays, vs. the amount of federal taxes that the people you know pay. Or you’re confused with the concept of marginal tax rates or deductions. And what is the 3% you keep talking about? Nobody thinks that 3% is the amount of total Federal, state, local and sales tax the average person pays. Nobody. The [Tax Freedom day cite](http://en.wikipedia.org/wiki/Tax_Freedom_Day) mentioned earlier puts the current amount at 28.0% on average. This includes local, state and federal taxes. And this figure is historically low. And it is low compared to most other countries. I don’t know what you mean by “taxes” that are not included when we talk about taxes. You need to specify _exactly_ what “taxes” we’re missing. Why exactly is that cite above wrong? What taxes are they not including? And do you think they included them in previous years or for other countries, rendering the comparison useless? ---
**Author:** ![sbright33](https://avatars.discourse-cdn.com/v4/letter/s/8e8cbc/32.png) [@sbright33](https://boards.straightdope.com/u/sbright33)\ **Post date:** [January 5, 2012, 11:59pm UTC](https://boards.straightdope.com/t/average-total-taxes/608479/78 "2012-01-05T23:59:57Z")
@dracoi- 24/52= 46%? @dewey- 28 cannot possibly be correct because 24% is the federal tax rate on average calculated like this: Federal income tax rate = Total federal income tax collected / Total Earned income Including the other taxes will about double the income tax (including state income taxes). @euph- Correct. 3% is the amount in the Washing Post article for federal income tax 40-60th percentile average. The other taxes including state tax are much less than 3%. Ridiculous. It also says 46% of filers pay NOTHING. I linked to the taxes that were not included. It’s hard to be specific when the Tax Freedom site doesn’t specify what is included. I will dig further. ---
**Author:** ![Euphonious\_Polemic](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/euphonious_polemic/32/3002_2.png) [@Euphonious\_Polemic](https://boards.straightdope.com/u/Euphonious_Polemic)\ **Post date:** [January 6, 2012, 12:36am UTC](https://boards.straightdope.com/t/average-total-taxes/608479/79 "2012-01-06T00:36:00Z")
I do not think you understand tax rates, or what this article in the Washington Post says (link?) The tax freedom link (in Wikipedia) says it included all Federal, State and local taxes. Which “taxes” do you think they failed to include? Again, NOBODY thinks that 3% is the average federal, state and local taxes paid. ---
**Author:** ![Ravenman](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/ravenman/32/2929_2.png) [@Ravenman](https://boards.straightdope.com/u/Ravenman)\ **Post date:** [January 6, 2012, 1:07am UTC](https://boards.straightdope.com/t/average-total-taxes/608479/80 "2012-01-06T01:07:12Z")
**sbright33** – the main problem here is that you are asking a half-dozen questions, getting factual responses, and then not understanding what answers go with which of your questions. Let’s take this one step at a time. The Washington Post has an article that correctly states that 20% of all taxpayers, who happen to be right in the middle of median income of all workers, pay 3% of their income in Federal income taxes. This 3% does not represent all the taxes they pay. Those very same taxpayers pay 9.4% of their income in social insurance taxes, and their total Federal tax bill amounts to 14.2% of their income (once all other Federal taxes are added in). For these taxpayers, who have an average income of roughly $60,000, we don’t have reliable numbers about how much they pay in state and local taxes because it varies too much. Overall, for all Americans, rich or poor, paid an average of 20.7% of their income in Federal taxes. This is all Federal taxes. Nothing is left out. My cite for all the preceding claims is on the first page, with the Congressional Budget Office. I do not believe one can accurately calculate the average tax burden on Americans by taking the amount of revenue and dividing it by an estimate of total income, for a few reasons. One is that some Americans essentially get a “negative income tax” because of the earned income tax credit. Instead of paying Federal income taxes, they get “tax refunds” because of the EITC. In fact, the lowest 20% of income earners get 6.6% of their income from the EITC. Long story short: you can’t simply divide tax revenue with income and get an accurate number. Experts have produced data on how much taxes people pay, so listen to the experts (like the Congressional Budget Office) as opposed to doing your own arithmetic. Next point: several people have pointed to a fairly reputable thinktank that has estimated the average total Federal, state, and local tax burden on Americans. Their methodology is listed on the website, which has been linked to a couple times. If you read the methodology, you will understand that they are not hiding certain taxes, double-counting other taxes, or playing other such games. They estimate that roughly 28% of one’s paycheck goes to all taxes, but of course individual cases will vary widely: richer people will pay more, poorer people will pay less. All of this is very clear if you carefully look at the cites that have been provided several times now. Take a careful look at the CBO citation on Federal taxes, the Tax Foundation’s methodology. It is all very clear if you read the citations. [Previous page](https://boards.straightdope.com/t/average-total-taxes/608479.md?page=3) [Next page](https://boards.straightdope.com/t/average-total-taxes/608479.md?page=5)