75% is a bogus number for many reasons. One is that you can’t directly add marginal tax rates. Another is that some of these taxes are offset on the federal tax base, e.g., you can deduct certain state taxes from your income for the purpose of determining adjusted gross income.
A more useful measure is the ratio or percentage of total taxes (state, federal and local) to total income.
According to the Statistical Abstract of the USA http://www.census.gov/compendia/statab/2012/tables/12s0678.pdf total income in the USA for 2011 was $12.5 trillion.
According to http://www.usgovernmentrevenue.com/total_revenue_2011USrn total state, federal and local taxes came to $4.9 trillion.
Thus, of every dollar of income, on average 39.1% is consumed in various taxes.
If you factor in health insurance, then it’s entirely possible to get this average figure close to 50% on average.
But 75%, not true.
Jack
There is no way you pay $12,000 for property tax in CA.
Base tax is 1% of the assessed value. $12,000 is 1% of $1.2 million.
First thing I thought when I started reading the post. Thanks for pointing this out.
“Thus, of every dollar of income, on average 39.1% is consumed in various taxes.”
Yours is a more sensible way of arriving at the average tax burden. HOWEVER, we borrow 40 cents of every dollar of federal spending. A more accurate measure of the burden would be to compare total government spending to total GDP since every dollar borrowed eventually will have to be repaid in taxes etc.