How to save for retirement: How to lower your taxes
The average tax rate paid by workers has been increasing since the Great Recession, but the tax break that pays for it has been declining.
As of last year, taxpayers paid an average of 3.6 percent in federal income taxes, according to a new report from the Tax Foundation.
That’s down from the peak of 5.5 percent in 2011.
Workers paid more in federal taxes than they did in 2009, and they paid about 6 percent of their income in federal and state taxes.
Workers’ average federal tax rate has also fallen over the past four years.
The average federal income tax rate in 2018 was 5.3 percent.
This is the lowest rate since the early 1990s, according the Tax Policy Center.
Read more at AxiosThe average federal and payroll tax rate fell in 2018, falling from 6.1 percent in 2018 to 5.2 percent in 2019.
However, workers still paid a higher percentage of their wages in taxes than workers did in 2017.
Workers earned $47,000 in 2018 on average, while workers earned $51,000.
The Tax Policy Institute estimates that the average wage paid by Americans is about $20,000 lower than it was in 2017, when it was $56,000 per year.
“A small share of Americans earn more in taxes.
The majority of workers, however, earn less in taxes, and a small share earn more than they pay in taxes,” the Tax Center says.
“The tax system is set up to help the wealthy, who pay a smaller share of their earnings than everyone else.”
Read the full report from Tax Foundation here.