Americans Paying More in Taxes than for Food, Clothing, and Shelter

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The Foundation reports that, “In 2012, Americans will pay approximately $4.041 trillion in taxes, which is $152 billion, or 3.9 percent, more than they will spend on housing, food, and clothing.

The Tax Foundation, founded in 1937, is a non-partisan think tank. Its mission, though, is obviously anti-Washington because its agenda is to educate Americans about our Byzantine tax system and advocates a simpler, fairer tax code. Today, the Foundation reports that, “In 2012, Americans will pay approximately $4.041 trillion in taxes, which is $152 billion, or 3.9 percent, more than they will spend on housing, food, and clothing. Through looking at contemporary data and examining the trend of tax collections and expenditures on housing, food, and clothing, we can compare the costs of government with the necessary costs individuals incur every year. Relative to the basic cost of living, taxes have increased considerably in recent decades. In turn, a greater share of essential private expenditures are now funded through government outlays.” Those government outlays (promises), BTW, threaten to bankrupt us unless promises will be broken.

Bear in mind this has been going on for a two decades, with the biggest gap occuring in 2000, when the government took 19 percent more from its citizens then its citizens spent on these essential expenditures.

To be fair, if you add in healthcare and transportation, Americans spend more on thes basics than on taxes. Also, there is some double counting. Money is taxed, redistributed and then consumed by other in federal programs on these basic items. Still, the statistic is alarming. The tax burden, its complexity and the desire for people to control their own property (i.e. to pass their money on to their heirs) is one reason why our sister publication, Trusts & Estates, exists! And has been published for more than 100 years!

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on Aug 14, 2012

That of course depends on how much one earns. Doing a very crude calculation, my guess is that one needs to earn over 105k -140k per year for the study to apply. Whether one is still working or retired, if your making over 105k on dividends ( at 4%) you might have 2.5-3 million invested assets. If that's the case..Congratulations!!! That's the goal for sure. I realize my calculation is quite crude but the point remains that if you as an individual are paying in taxes than food, shelter clothing..plus or minus health care, you are fairly well off and should give your advisor a big hug!!

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