How much TOTAL Tax does an American pay on average yearly?

Thanks for this info! Do you know if there's a way to calculate my personal tax burden? Like some online calculator where I can input my income, state, property value, etc. and see my true tax percentage? Also, how does the US compare to other developed countries in terms of total tax burden?

There are some tax burden calculators online, though I haven't found one that captures absolutely everything. SmartAsset has a decent one that factors in income, property and sales taxes. For a truly comprehensive view, you might need to track your spending for a year and calculate all the embedded taxes. The US actually has a lower overall tax burden than most developed countries. OECD data shows the US total tax revenue as a percentage of GDP is around 26%, while countries like France, Denmark, and Sweden are all over 40%. However, those countries also provide more comprehensive public services like universal healthcare that Americans typically pay for privately.

That sounds useful but how accurate can it really be? Like how does it calculate sales tax when that depends on everything you buy throughout the year? And does it factor in things like cigarette taxes if you're a smoker?

Is this some paid service? What makes it different from just using something like TurboTax that already shows your effective tax rate?

It uses spending pattern estimates based on income level and location, then applies your local sales tax rates to estimate your annual sales tax burden. You can adjust the estimates if your spending differs from the norm. And yes, it has options for consumption taxes on things like cigarettes, alcohol, and gas based on how much you use. This is different from TurboTax because it looks at ALL taxes, not just income tax. TurboTax shows your effective income tax rate, but doesn't account for property taxes, sales taxes, gas taxes, etc. It's more about seeing your complete tax picture across all the different ways governments collect revenue from you.

How does this even work? Is it legal? I thought you just had to wait on hold like everyone else when calling the IRS.

This sounds like BS honestly. Nothing can get you through to the IRS faster - they have their phone system set up to minimize the number of people who can get through. I'm pretty skeptical that this is anything but a scam.

It's completely legal! They basically use automated technology to wait on hold for you, then call you when they reach an agent. Think of it like having someone stand in line for you - there's nothing illegal about that. The IRS phone system allows calls in the order received, and this service just does the waiting part for you. I was skeptical too before trying it. I had spent over 4 hours on multiple calls trying to reach someone with no success. With this service, I was talking to an actual IRS agent in minutes. They don't do anything shady - they just handle the frustrating wait time part of the process.

This is super helpful, thanks! I never realized how much the range varies. Does this mean someone making $50k in Mississippi might pay a drastically different percentage than someone making the same amount in California? And is there any research on which tax structure is most efficient/fair?

Yes, the difference can be dramatic! Someone making $50k in Mississippi might pay about 25% of their income in total taxes, while the same person in California could pay closer to 35%, primarily due to California's higher state income tax and higher property values (which mean higher property taxes even on modest homes). As for which system is most fair/efficient, that's heavily debated among economists and often comes down to values. Progressive systems (where rates increase with income) are generally considered more fair by those who believe those who earn more should contribute proportionally more. Flat tax advocates argue simplicity and removing disincentives to earn more makes those systems more efficient. The research is mixed and often reflects the researchers' own economic philosophies.

This is so true. I lived in Sweden for a few years and filing taxes there took literally 5 minutes. They send you a pre-filled form with all your income info, you verify it's correct, maybe add a few deductions, then send a text message to confirm. Done. Coming back to the US tax system was a nightmare in comparison.

This is fascinating! I had no idea about the employer portion of payroll taxes essentially coming out of our wages. Do you know if there are any good resources that break down these "hidden" taxes in plain English? I'm particularly curious about how much tax is embedded in everyday purchases beyond gas - like groceries, utilities, etc. It sounds like we're probably paying way more than we realize on almost everything we buy.

Great point about the "hidden" nature being intentional! For resources on embedded taxes, I'd recommend checking out the Tax Foundation's research on tax incidence - they have some great breakdowns of how corporate taxes and regulatory compliance costs get passed through to consumers. For everyday purchases, you're absolutely right that we pay more than we realize. Groceries have embedded corporate income taxes from food producers, transportation fuel taxes from shipping, and regulatory compliance costs all built into the price. Utilities are even worse - they often have specific excise taxes, plus all the usual corporate taxes that get passed through to customers via rate increases. One eye-opening example: economists estimate that about 20-25% of the price of a new car represents various taxes and regulatory costs that manufacturers pass along. We see the sticker price but don't realize how much of that $30k car payment is actually going to government coffers through indirect channels. @Freya Andersen The Congressional Budget Office also publishes annual reports on tax incidence that show how the total tax burden including (these hidden taxes is) distributed across income groups. It s'dense reading but really illuminating!

This is such a valuable perspective from someone working in tax compliance! The bracket creep issue you mentioned is something I've experienced firsthand but never really understood the mechanics of. It's frustrating to get what feels like a raise only to end up in a higher tax bracket without any actual policy change. I had no idea about CAFRs - that sounds like exactly the kind of transparency tool that should be more widely known. Do you know if there's a good way to find these for local governments too, or are they mainly at the state level? I'd love to see where my city and county tax dollars are actually going beyond the high-level budget summaries they usually publish. Also, your point about the system feeling fragmented really resonates. It's like playing whack-a-mole with different tax bills throughout the year, which makes it hard to see the big picture of what you're actually paying overall.

@Ava Garcia, thanks for bringing up bracket creep - that's such an underappreciated issue! Most people don't realize that even without Congress passing new tax laws, their effective tax rate can increase simply due to inflation pushing them into higher brackets while the brackets themselves don't adjust proportionally. CAFRs are actually available at all levels of government - city, county, and state. You can usually find them by searching "[your city/county name] CAFR" or checking the finance/treasury section of your local government websites. Some are easier to navigate than others, but they're goldmines of information about where tax revenue really comes from and goes. What really opened my eyes working in this field is how much tax policy gets shaped by unintended consequences. A tax break designed to help small businesses might end up mainly benefiting large corporations that can afford better tax planning. Or a "sin tax" on cigarettes that's supposed to reduce smoking ends up creating a regressive burden on lower-income smokers while having minimal behavioral impact. The fragmented feeling you mentioned is spot-on - it's almost like the system is designed to prevent people from seeing their total tax burden clearly. When you're paying income tax through payroll deduction, property tax quarterly, sales tax with every purchase, and gas tax every fill-up, it's nearly impossible to track your actual total rate without deliberate effort.

@Jacinda Yu I m'right there with you on feeling shocked about the real numbers! I just moved to the US from Canada a few years ago and was completely unprepared for how complex and fragmented the tax system is here. In Canada, we definitely pay high taxes too, but at least it s'more transparent - you can easily see your total tax burden on your annual tax summary. What really surprised me was learning about all the embedded taxes in everyday purchases. I never realized that when I m'paying $4+ for a gallon of gas, I m'actually paying multiple layers of taxes that aren t'even clearly labeled. Same with my electric bill, phone bill, even my morning coffee probably has corporate taxes baked into the price. The detective work aspect is so frustrating! Why should citizens have to use third-party calculators and dig through government financial reports just to understand what they re'paying? It feels like the system is designed to keep us in the dark about the true cost of government services. At least now I understand why my paycheck never seems to stretch as far as I expected based on my salary alone.

This breakdown is so helpful, thank you for sharing the actual numbers! I'm also realizing I've been completely naive about property tax - I always focused on the mortgage payment but never really calculated what percentage of my income that quarterly tax bill represents. Your point about it potentially being bigger than federal income tax is mind-blowing. I'm curious about your comment on setting aside money monthly for property taxes - do you find that helps psychologically with seeing your "real" take-home pay? I think part of what makes this all so sneaky is that different taxes hit at different times throughout the year, so you never get that full picture moment where you see everything deducted at once like you do with payroll taxes. Also, did tracking everything for a full year change how you think about budgeting or spending decisions? I imagine seeing that 37% total would make anyone more conscious about major purchases or even where to live.

@Ava Martinez This is exactly the kind of detailed breakdown I was hoping to see! Your 37% total really puts things in perspective. I m'definitely going to start tracking my own taxes this systematically. Your point about property tax potentially being the biggest single burden is fascinating - I never thought of it that way because it feels so disconnected from my regular paycheck. It s'like they ve'designed the system so each tax feels small in isolation, but they add up to this massive chunk of our income. The monthly savings account idea is brilliant. Right now I just get hit with these quarterly property tax bills and it always feels like a surprise, even though I know they re'coming. Having that money set aside would probably make the true cost of homeownership much clearer throughout the year instead of just four painful reminders. Did you find any legal ways to reduce your total burden after seeing these numbers? I m'wondering if there are strategies that work across multiple tax types, not just the typical income tax deductions everyone talks about.

This is incredibly helpful advice! As someone just starting to understand my real tax situation, the location arbitrage point really resonates. I had no idea that moving to a different county could make such a significant difference - I always thought about state-to-state moves but never considered the local level. The HSA tip is something I've heard mentioned before but never fully understood the "triple tax advantaged" aspect. So you're saying money going into an HSA avoids federal income tax, state income tax, AND payroll taxes? That seems almost too good to be true! I'm particularly interested in the property tax appeal process you mentioned. How does someone even begin to challenge their property assessment? Is it something you can do yourself or do you typically need professional help? Given that property tax seems to be one of the biggest burdens for homeowners based on this discussion, even a small reduction there could be really meaningful. Your point about using the fragmentation to our advantage is a great reframe - instead of just being frustrated by the complexity, actually leveraging it for optimization. Are there any resources you'd recommend for someone wanting to take this "total tax planning" approach?

@Zoe Papadakis This is such valuable advice from a professional perspective! I m'particularly intrigued by the location arbitrage strategy. As someone who s'been working remotely since the pandemic, I never really considered that I could potentially save thousands just by researching property tax rates in neighboring counties. Your HSA point is a game-changer too - I had always thought of it as just a healthcare savings account, but if it really avoids ALL those taxes including payroll taxes, that s'like getting an immediate 7.65% boost on top of the income tax savings. Do you know if there are contribution limits that make this less effective for higher earners? The property tax appeal process sounds intimidating but potentially very worthwhile. I m'wondering if there are certain situations where appeals are more likely to succeed - like if your home value has declined due to market conditions or neighborhood changes? Really appreciate you sharing these strategies. It s'refreshing to see someone acknowledge that the complexity, while frustrating, can actually be leveraged rather than just complained about. This total "tax planning approach" seems like it could make a huge difference for people willing to put in the effort to understand the full picture.

@Jamal Washington Your point about the psychological stages really hits home! I m'definitely somewhere between anger and bargaining right now after reading through this thread. The reframing to think of it as purchasing "services is" helpful, though I wish there was more transparency about which services we re'actually getting for that 40%. What really frustrates me is that this information isn t'taught in schools. I graduated with a business degree and still had no clue about the true scope of taxes until stumbling across discussions like this. It feels like we re'expected to navigate this incredibly complex system without any real education about how it works. Your point about being a more informed voter is crucial too. I realize now that when I hear about a 2% "tax increase, I" have no context for whether that s'on income tax, property tax, or some other category, and how it would actually impact my total burden. No wonder political discussions about taxes feel so disconnected from reality - most of us don t'even know what we re'currently paying! This thread has definitely motivated me to do my own comprehensive tax analysis and start that monthly savings account for property taxes that others mentioned. Better to face the numbers head-on than keep being surprised by them.