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1 Claire M. Hintz, The Tax Burden of the Median American Family 1 (2000)

handle is hein.taxfoundation/srjgxz0001 and id is 1 raw text is: TA X 1 lMnt
FOUNDATION
March 2000
No. 96

The Tax Burden of the Median American Family
Two-Earner Family's Total Tax Burden Slips Under 40 Percent

Of the many questions surrounding tax
policy, few can match the substantive and
political importance of the total tax burden on
the median family. Taxes are the most funda-
mental means of pricing out government, and
yet few taxpayers have a clear notion as to the
price they pay.
Assessing the Total Tax Burden
Taxpayers pay such a wide variety of taxes
at the federal, state, and local levels. Some
taxes are easy to detect, like a personal income
tax or a sales tax, but many taxes go unseen.
That happens when third parties-people who

do business with taxpayers- have to pay taxes
that end up being passed on to taxpayers in the
form of higher prices or lower income. For
example, employers pay half of all payroll
taxes, and these taxes diminish salaries. Also,
when corporations pay their own taxes, they
pass that cost on. Unfortunately, taxpayers are
mostly unaware of these hidden taxes even
though they make up a significant fraction of
the family's real tax burden.
This lack of transparency in the national
tax system is a great flaw that this study helps
to remedy. For historical comparison, this
study presents a fifty-year series of the aggre-

50%

Figure I
Taxes as a Percentage of
Median Family Income
Selected Years, 1955-1998

40%
30%
20%
10%

Families with One Earner  N  Families with Two Earners

1955  1965   1975    1985  1995   1996   1997   1998

by Claire M. Hintz
Senior Economist
Tax Foundation

Source: Tax Foundation

_ j

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