Wednesday, July 29, 2015
Taxpayers may be handing over a lot more of their earnings on pay day than they realize. According to a recent Tax Foundation report, wage earners in the U.S. average a 31.5 percent tax burden on their pre-tax income, or over $17,000.The average U.S. wage earner faces two major taxes: individual income tax and payroll tax, levied on both the employer and the employee. Although a little more than half the worker’s payroll tax burden is paid by his or her employer, the worker ultimately pays this tax through lower take-home pay.
While the revenues from these taxes pay for government programs, it is important to know what the cost of these programs are from the average worker’s perspective. Of the average $17,372 tax burden, $8,631 is for the individual income tax and $8,741 is for payroll taxes.
In the absence of income and payroll taxes and the benefits they provide, the average worker would take home nearly $5,000 in additional annual income, the report found.
Source: Tax Foundation
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