# Tax rate in America

There are hidden taxes in everything a person buys. In the end, only the consumer pays these taxes, and at that, only private consumers. Government workers, people on welfare or other public assistance are paying these taxes with tax money collected from private workers. Businesses do not actually pay taxes, but pass on any taxes they pay to the consumer. In the end, only the private worker pays taxes because thats where the buck stops.

What is the actual tax rate in the US?

In 2013, the sum of all taxes collected at all levels of government was \$5.4 trillion (from http://www.usgovernmentrevenue.com/total). which was 33% of the Gross Domestic Product. Total GDP was \$16.8 trillion

What is GDP?

Gross domestic product (GDP) is defined by OECD as “an aggregate measure of production equal to the sum of the gross values added of all resident institutional units engaged in production (plus any taxes, and minus any subsidies, on products not included in the value of their outputs).*

IE: A business buys \$100 worth of raw materials to make a \$300 product, which leads to \$200 addition to the GDP. The \$100 cost of materials includes all the hidden taxes the suppliers pay when making the raw materials. It is not possible for any business or individual to separate out all of the taxes, and neither can the government.

So to find the actual tax rate, we need to subtract the total taxes from the GDP, and then divide the total taxes by that amount.
Doing so, we find 5.4/(16.8 – 5.4) = 0.47 or 47% !

So when I buy a loaf of bread for \$3, \$2.04 is for the bread, and \$0.96 is tax! Buy a house for \$200,000, and you are paying \$64,000 in taxes.

In the year 2000, the tax rate was 41%

The trend is clear, the tax rate is climbing and this is why we are becoming a third world country with no jobs and decreasing wealth.

* From Wikipedia

Edited to reflect updated data.

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