New Report says Americans Now Spend More Money on Taxes Than Food, Clothing and Shelter Combined

© George Pchemyan/Getty Images
© George Pchemyan/Getty Images

Every year, the Tax Foundation compares the total amount of taxes paid in America and the amount of spending on the necessities of food, clothing, and shelter. In most recent years, the Tax Foundation has concluded that Americans spend more on taxes than on necessities — and 2015 is no different. 

The Tax Foundation projections show a total of $4.85 trillion in taxes paid in 2015, divided between $3.28 trillion in federal taxes and $1.57 trillion collected at the state and local level. According to the Tax Foundation, total taxes are approximately 31% of the national income. Using data available from the Bureau of Economic Analysis (BEA), the Tax Foundation calculated approximately $4.3 trillion in spending for the basics with food at around $1.8 trillion, clothing at $0.3 trillion, and housing at $2.2 trillion.

Here’s the real question: Is this spending comparison indicative of a problem or of a correct and equitable tax structure? Should any of us be outraged? Probably not, although there are reasons for concern.

Certainly, the trend is not promising. The gap between taxes and spending on the essentials in 2012 was approximately $150 billion, rising to almost $300 billion in 2014 and around $550 billion in 2015. It’s hard to spin that as a positive development.

The Tax Foundation’s report also says nothing about equity of taxes and spending. Certainly, the Tax Foundation can leave the impression that taxes are too high for all Americans by using aggregate values. More progressive sites such as the Center on Budget and Priority Policies (CBPP) call these values misleading, pointing out that with our progressive tax system, poorer Americans clearly pay a greater share of their income for the essentials and less in taxes.

Meanwhile, the wealthy pay more in taxes and while they may make more discretionary purchases in food, clothing and shelter, it isn’t enough to make up the difference. Therefore the “average” (middle-class) American probably does not pay more in taxes than for the basics, and the lower income levels certainly do not.

Click here to read more

Source: Money | Anita Hamilton

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s