With Labor Day weekend here, now is a good time to remember just how much of everyone’s paycheck goes to the federal government:
Nearly 32 percent.
That number is the average American worker’s total tax burden in 2016, according to a recent report by the Tax Foundation.
From the Tax Foundation:
Although the United States and most OECD countries are known for having progressive tax systems that tax high-income earners more than low- or moderate-income earners, a large portion of the tax burden still falls on the average worker. Even here in the United States, which has a lower tax burden than most other OECD countries, average workers end up paying nearly one-third of their incomes in taxes. It is true that governments in the OECD, especially European countries, provide more government programs. However, their workers end up paying a much higher price for them.
This means the average American worker toils for four months a year just to pay his tax bill to the government.
At the state level, Arkansas has the highest surrounding top income tax rate — compared to all of its surrounding states — at 6.9 percent.
Fortunately, Gov. Asa Hutchinson has said he hopes to get that number down to 5 percent — which would make us more competitive with the surrounding region.
Both Oklahoma and Mississippi currently have top individual income tax rates of 5 percent, so Hutchinson’s goal is definitely doable.
Here at The Arkansas Project, we think more of the fruits of your labor should be staying with you, instead of being taxed by the government. That’s why we advocate year/round for principles like lower taxes, less regulations that make it harder for you to earn a living, and thrift in government spending.
With that sentiment in mind, we wish you a Happy Labor Day!
You can read the entire Tax Foundation study here.