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Taxes: How much do you really pay?

The average
The average

Depending on social views and one’s place in the political spectrum, he or she either believes Americans ought to pay more in taxes, less in taxes, or that local and federal governments deduct about the right amount from their family’s income. Truth is, the average American, including many who would vote in favor of raising taxes, has no idea how much he or she pays in taxes.

Government tax codes are so difficult to understand that most people pay someone else to file their tax forms or they use specialized computer software to sort things out. Despite such electronic computations of state and federal income taxes, many of us never consider county and state sales taxes, state and federal gas taxes, phone taxes or fees and other taxes levied against various commodity items and services.

Political stripes and ideological bluster notwithstanding, all reasonable people understand that there is a price to be paid for infrastructure like roads, aid to the impoverished and law enforcement. The question is how much is enough for a government that has already incurred a $17 trillion national debt, including $6.5 trillion in the last five years.

According to federal government the national average wage index for 2012 was $44,321 annually, which equates to just over $88,000 for a typical two-income family. If this sounds like a lot of money, consider the annual expenses incurred by a typical family of four with two wage earners.

$15,000 rent or mortgage; $3,640 in gas for 2 cars; $13,000 medical and car insurance; $6,000 state and local sales tax; $6,200 groceries; $8,800 rep. 10% savings; $8,000 daycare for two children; $8,000 in car payments; $5,000 for family shoes and clothing; $5,000 vacation and entertainment; $4,000 utility bills; $2,000 property tax; $7,000 state and federal income taxes; $1,000 co-pays and insurance deductibles, and $3,000 for items like dental braces and eyeglasses.

With an annual debt of $94,640, barring any serious health problems, natural disasters and unexpected financial burdens, the aforementioned typical family of four is already $7,000 in the hole. Meanwhile, complicating the how-much-is-enough tax issue, two-income families are in steep decline and the percentage of single parent families has risen sharply in recent years. For example, as of 2011, only 51% of adults in America are married, down from 72 % in 1970.

The number of people living alone in America rose from 17% in 1970 to 27% in 2007, and the average household size declined from 3.1 people in 1970 to 2.6, according the latest 2007 figures recently released by the US Census Bureau. Meanwhile, experts say the situation has significantly accelerated.

Utah had the highest percentage of households with children under age 18 maintained by married couples (82%), while Washington, DC, where federal taxes originate, had the highest percentage of households with children under age 18 maintained by a single parent (54%), the study found.

When it comes to increasing taxes, politicians who refuse to balance government budgets aren’t concerned with your family’s budget. That’s why it’s important that average Americans understand how much they’re really paying in taxes before voting for politicians who propose increasing them.

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