Food & Cooking
Non-US Taxes

How much does the average family spend on taxes?

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Wiki User
December 10, 2012 1:40AM

In most of the US it's about 40% of income.

That depends definitely on where they live. In Massachusetts for

instance, the average family earns $51,000. Of that about $3000

goes to federal taxes, $5000 to state taxes, and $8,000 to property

and local taxes. After that and housing expenses are deducted that

leaves about $25,000, food and clothing costs about $8,000 a year

and is not taxable. That leaves $17,000. Transportation costs

(fuel) are about $2000 a year of which ~$1200 is federal and state

taxes. Medical costs are about $5000 a year (some of that is taxed)

leaving $10000. From that $10,000 is about $1500 for utilities of

which about $900 is taxes, this leaves $8500 for sundry items

(taxable) and other discretionary spending (again taxable) the

states sales tax rate is 7% so that would be about $600. Some items

like alcohol and tobacco also have excise taxes on them and lottery

tickets are pure 100% tax. Assuming a portion goes to these items

we can assign a tax estimate of about $400 to these items on


So, by adding up these various taxes this hypothetical average

family spends about $20,000 of their income on taxes. That is

nearly 40%. This does not include other fee for services provided

by many communities such as sewer/water or garbage pickup, license

and registration fees ...etc. which increases the tax costs.

***It should be noted that as a person's income increases,

though the income tax paid increases, the actual tax burden

decreases as fee for service and excise and sales taxes are finite

taxes and do not increase as a function of the increase in income.

Thus, to a point [estimated to be about $80,000 or so] a person's

tax burden as a percent of income increases until this point is

surpassed, then it rapidly decreases toward about 24% of income for

the wealthiest, who do not "earn" the majority of their income by


Thus they pay the adjusted minimum tax rate of about 15% plus 8%

on capital gains and most other taxes amount to less than 1% of

their income [we're talking billionaires]. Some of their tax burden

though monetarily much greater than the average, can be offset by

losses and charitable donations. Many donate tens of millions if

not hundreds of millions to charities.

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