Is it true that we Americans get taxed 40% of their pay checks?

Question

If not then what is it?

Answer 1

The total of all taxes paid in the USA is about 33% of the gross national product, the lowest of western industrialized nations so 40%of payroll is way too high.

Answer 2

This is a modified answer to question that can be made to be quite complex; but in a simple sense the answer to your question is “yes”.

Those folks who are in the higher tax brackets pay about 28% federal & 12% state income tax.  In addition, they pay about 7.5% social security (about 14% if self employed) on the first $96,000 of income.  As the social security drops off, the proportion of state & federal income tax increases.

Answer 3

It's possible for a high income person, especially in a high income state.  Otherwise no, not even close on payroll taxes for an employee, for most people more like half of that.  For an independent contractor who pays both the employee and employer parts of social security and medicare, it can reach 40%.

Answer 4

You also get taxed in other ways than on your paycheck.  You may pay property taxes.  You probably pay sales taxes.  You pay excise taxes (on gasoline, cigarettes, etc.)  The total tax may hit 40 %.

Answer 5

While you may pay many forms of taxation (property, retail sales, wage, car rental, etc.) the part that comes directly from your pay check is around 40% if you make more than 80k and you don't do much with your money.

Highest tax scenario is single w/o kids. In 2007 you touch the 28% level at $77,100. FICA (social security) gets another 7.65%. Your state rate will vary, but 4.15% (which you will be over at $77k in most states) puts you at the magic 40% in your question. If you live in a no wage tax state, you are likely under 40% paycheck tax.

The good news is most folks have deductions that take them well under the 40% level.

Get some tax freedom day info for your state for a closer estimate of tax burden.

http://www.taxfoundation.org/taxfreedomd...

Answer 6

It all depends on how many deductions you claim.  If you have a family, they can be claimed as deduction thus lowering your tax burden.  If you're single with limited deductibles, you do get taxed outrageously high (not 40% though) because the government figures you don't have anyone else to support but yourself so you can do with less money.  And the final percentage will also depend on what your state, county, city taxes.  On top of taxes, you might get other fees taken out of your paychecks too.