The following are some of the important findings in the study “Which Taxes Weigh Most Heavily on Americans with Different Incomes?” released March 26 by the Tax Foundation.
- State and local sales and gross receipts taxes cost households in the bottom 40 percent of earners more than they pay in federal income taxes each year.
- For households in the bottom 20 percent of annual income, state-local sales and gross receipts taxes and property taxes ($1,814 per household) are larger than all the federal taxes they pay each year combined ($1,684 per household).
- For households in the bottom 80 percent of earners, federal payroll taxes make up a larger slice of the annual household tax bill than federal income taxes.
- For households in the bottom 20 percent of incomes, the burden of federal corporate income taxes–paid in the form of lower wages and lower stock returns–is greater than the amount of federal income tax they pay.
- U.S. households on average spend $511 per year on federal, state, and local gas taxes.
- For households in the middle 20 percent of incomes, federal payroll tax burdens are about 14 times higher than federal gas tax burdens. Federal corporate income tax burdens are about 3.6 times higher than gas taxes for that group.
- Despite earning much lower incomes, households in the second-lowest 20 percent of earners pay more dollars of cigarette excise taxes per household than those in the top income group. The largest share of per-household tobacco taxes are paid by the middle 20 percent of earners.
For more information …
“Which Taxes Weigh Most Heavily on Americans with Different Incomes?” Tax Foundation, March 26, 2007, http://www.taxfoundation.org/news/show/22287.html