Taxes and your wallet: What the average American pays

Taxes and your wallet: What the average American pays

Tax season Opens a New Window. is officially underway – and many Americans are looking forward to getting a chunk of their hard-earned money Opens a New Window.  back in the form of a refund this season.

While the average person expects to receive about $3,000 back from the Internal Revenue Service (IRS), she will have likely give up around 30 percent of her pre-tax earnings to the agency.

That’s according to research from the Organization for Economic Co-operation and Development (OECD), as cited by Tax Foundation Opens a New Window. , which analyzed tax returns among single Americans with no children earning an average income in 2017. The group found that the average burden – without accounting for state and local sales taxes – per person was $18,198, the equivalent of 31.7 percent of pretax earnings.

Income taxes accounted for an estimated 16.9 percent – about $9,700 – of the total tax burden, compared with the average among OECD countries of 13.5 percent.

U.S. payroll taxes accounted for about $8,495.

A person who made $57,407 in pretax earnings kept about $39,209 in 2017, about 68.3 percent.

However, the tax burden decreases substantially for a married couple with two children, to about 20.8 percent. That is consistent with trends in most other OECD countries.


When compared with countries in the OECD, the U.S. has the 11th lowest tax burden – compared to the average among all 35 members of nearly 36 percent. Chile had the lowest overall tax burden, at 7 percent, followed by New Zealand.

However, U.S. taxes are expected to fall as a result of the Tax Cuts and Jobs Act. The 2018 tax season—which officially began on Monday – is the first to take the new law into account.

Source:- foxbusiness