Moody points out that the steady rise in the fraction of our income devoted to federal taxes is primarily due to the economic expansion that pushes people into higher tax brackets, filling government coffers faster than Americans' pocketbooks. Figure 2 presents a breakdown of the nation's tax bill for 2001 by type of tax. Individual income taxes represent the largest component of Americans' tax bills. In 2001, Americans will have to work an average of 50 days to pay these taxes. Another 29 days will be spent working to pay payroll taxes, which fund social insurance programs such as Social Security and Medicare.
Some taxes are less apparent to the taxpayer than income and payroll taxes.
Americans will work 16 days to pay these add-on taxes that raise the prices of nearly all goods and services. Another 10 days will be spent working to pay property taxes, mostly levied by local governments. Americans will then have to work an additional 12 days to pay their share of corporate income taxes, which are collected from companies but ultimately paid by consumers, employees, and shareholders. Finally, Americans will spend five days working to pay other business and miscellaneous taxes. Taxes and Other Expenses Figure 3 uses the number of days worked as a yardstick to measure the price of government against the price of other important categories of consumer spending.