How much buying power do you have for every dollar earned?

[theGinsue]

I'm sure that I could make a semi-accurate calculation on this for myself if I put the time into it, but I've often wondered how much true buying power I have for every dollar that I earn.

Sure, it's easy to see the loss of income from income and Social Security taxes as those come off of the top, but what of the other taxes? When you consider Federal and State income taxes, sales taxes, personal property taxes (the tax to keep what you already own), and the myriad of government fees charged on top of taxes, how much money do you actually have left of each dollar you earn? Is it 50% (doubtful)? 40%? Is is even 20%?

Every time an election cycle comes by we see more and more requests for tax increases. It seems like the various governmental bodies are doing less and less with each dollar they acquire causing them to demand more and more - and this leaves us with less and less to spend on things we want and need.

So, has anyone ever done the math to determine how much of their income actually remains after paying all of the taxes?

[CS1983]

Would you include sales tax in this? "fees"? things you are legally forced to own but would not otherwise do so if you had a choice?

[theGinsue]

Yes, I would include any of your income that is paid out to any level of government, until any title (tax, fee, etc.).

[theGinsue]

Here's something else I wonder about which can be answered by those receiving Social Security benefits:

I know you have to pay income tax on Social Security benefits received, but does the .fed also charge Social Security/Medicare tax to those benefits? Wouldn't that be a bit like a snake eating its own tail?

[mpatch]

Here's something else I wonder about which can be answered by those receiving Social Security benefits:

I know you have to pay income tax on Social Security benefits received, but does the .fed also charge Social Security/Medicare tax to those benefits? Wouldn't that be a bit like a snake eating its own tail?

You don't pay taxes on all of your SS, if you're under a certain amount it's tax free.
As to your initial question I would say for the average working person 40% of what they earn isn't taken in one way or another.

[D_F]

2 other points along this line that have always driven me crazy.

As an employer, we pretty much match income SS taxes etc. for our employee's. So a step farther would be for every dollar earned from the economy what part does the gov take?

And AOC and all the socialist folks keep talking about 70-90% tax rate for the rich. These are the folks with enough money to stay one step ahead of tax regulations. So it's kinda like 70-90% of nothing, or very little. The ones that really push my buttons are the folks who take pay "under the table" and then complain about how the rich aren't paying their fair share.

[Great-Kazoo]

You don't pay taxes on all of your SS, if you're under a certain amount it's tax free.
As to your initial question I would say for the average working person 40% of what they earn isn't taken in one way or another.

Not really. They tax you, but you get it back depending on total household income. However you see less of it up front, as some goes to medicare.

Either way everyone is screwed.

[StagLefty]

I don't file or pay taxes on my SS retirement income but if I work a part time job for awhile I file to get the taxes back (if I fall under the income level required). I've never quite comprehended why I pay SS or Medicare taxes when I work part time when I'm on both. You don't get those back just Fed and State.

[asystejs]

Are you looking for something like ....


FICA Medicare State FedTax 401k
100% - ( 12.4% + 1.45% + 4.5% + 17% + 16% ) = 48.65

[ray1970]

In the real world I would guess I get to spend about 60% of what I earn. Maybe.