Five Charts Show What Americans Really Pay in Taxes
A lot of Americans feel like they’re getting cheated at tax time. In a Pew Research Center poll last year, 61 percent said it bothered them “a lot” that “some wealthy people don’t pay their fair share.”
You can learn a lot about the U.S. tax burden by looking at five simple charts.
Certain well-paid people pay out a good chunk of their salaries.
Of course, wealthy people don’t often pay 39.6 percent. Many of them lower their rate with deductions, including those for charitable donations and mortgage interest.
How much do Americans pay in taxes overall?
That doesn’t include state income taxes, which can add 10 percentage points or more to your tax burden depending on where you live.
Meanwhile, seven states have no income tax at all: Alaska, Florida, Nevada, South Dakota, Texas, Washington, and Wyoming. Other states also have relatively low rates:
It can be misleading to measure Americans’ tax loads only by their income taxes. U.S. workers also owe payroll taxes to Social Security and Medicare.
The Organization for Economic Cooperation & Development makes this calculation. For the U.S. in 2014, the most recent year for which data are available, the OECD figures the average single worker1 earned wages of about $50,000 and paid out 25 percent in state and federal income and payroll tax. Parents owed less because of deductions they can take for their children.
The tax burden is lower in the U.S. than in many other developed nations. Of 34 OECD countries, the U.S. tax rate for the average single American with no children ranks No. 17.
Original Story at Bloomberg.