The average American spent more in taxes last year than on health care, clothing, food, and entertainment expenses combined.
According to the Bureau of Labor Statistics’ Consumer Expenditures Survey for the year 2020, Americans’ tax expenses outweighed the amount that they spent to cover their most basic needs.
An analysis from the Media Research Center reveals that “consumer units” — defined as “families, single persons living alone or sharing a household with others but who are financially independent, or two or more persons living together who share major expenses” — spent an average of $17,211.12 in taxes:
- Federal income taxes — $8,811.78
- State and local income taxes — $2,492.71
- Social Security taxes — $5,392.35
- Property taxes — $2,353.42
- Other taxes — $71.87
- Stimulus payments — ($1,911.01)
Meanwhile, the average core expenses for a “consumer unit” amounted to $16,839.89:
- Food — $7,316.47
- Clothing — $1,434.26
- Health care — $5,177.01
- Entertainment — $2,912.15
The typical American therefore paid the state, local, and federal governments a total of $371.23 more than his or her expenses for food, clothing, health care, and entertainment.
Despite the high level of taxation — which still outweighed basic living expenses despite the advent of COVID-era government stimulus checks — Democrats recently introduced a provision that would raise an additional $2.9 trillion in federal taxes.
The proposed hikes — drafted by House Ways and Means Committee Chairman Richard Neal (D-MA) — come as Congressional Democrats weigh a $3.5 trillion social spending agenda. The legislation — which incorporates key elements of the American Jobs Plan and American Families Plan — would grant the federal government authority to establish universal pre-K, tuition-free community college, paid family and medical leave, additional health benefits for Medicare, and a “Civilian Climate Corps.”
Among other changes to the federal tax code, Democrats want to increase the top individual rate from 37% to 39.6%; introduce a graduated rate system for corporate taxes and peg the highest rate at 26.5%; and increase the top capital gains tax rate from 20% to 25%.
The bill would also allocate another $80 billion to the Internal Revenue Service so that the agency can enforce payments from high-income taxpayers.
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