Category Archives: taxes

How Much Do You Pay in Sales Taxes?

If you had to pick a sales tax rate that would be "typical" for what consumers pay when they buy things in your state, what rate would you pick?

That's a tough question to answer because in addition to state sales taxes, you may also have county, city, and municipal sales taxes added onto your receipts whenever you buy something. Plus, it's quite unlikely you only do all your shopping within your home town or county. What you pay in combined state and local sales taxes will differ depending on where your transactions take place.

The Tax Foundation has a neat solution for determining the average combined state and local sales tax rate for an entire state. They start with the most local sales tax rate data they can get, roughly all the way down to the zip code level. They take these super-local sales tax rates and add them to the state's sales tax rate, then weight them according to the percentage of the state's population that lives within the super-local regions these combined sales tax rates apply. The final result is a population-weighted average combined state and local sales tax rate.

In the following interactive map, we've presented their results for each state.

Here's a little more background for what this data shows:

Retail sales taxes are one of the more transparent ways to collect tax revenue. While graduated income tax rates and brackets are complex and confusing to many taxpayers, sales taxes are easier to understand; consumers can see their tax burden printed directly on their receipts.

In addition to state-level sales taxes, consumers also face local sales taxes in 38 states. These rates can be substantial, so a state with a moderate statewide sales tax rate could actually have a very high combined state and local rate compared to other states. This report provides a population-weighted average of local sales taxes as of January 1, 2023, to give a sense of the average local rate for each state.

As of this writing, the data reflects the nation's population distribution as of 2010. It may be interesting to see how the population-weighted combined state and local sales taxes change after the 2020 Census data becomes available, even if the state and local taxes themselves didn't change.

But wait, there's more!

Although they didn't map it, the Tax Foundation also included the basic statewide sales tax rates with their analysis. That data is presented in our next interactive map!

If you go back and forth between the two maps, you can get a sense of how much local sales taxes add to the shopping bills of consumers in your state of interest. Assuming, of course, they do most of their shopping where most the population of the state lives!

Tax Day 2023: The Original IRS Form 1040

Stable Diffusion DreamStudio Beta: A greedy Uncle Sam wants to make Americans pay taxes

U.S. Income Tax Day arrives on April 18 in 2023. And what better way could there be to celebrate the most dreaded day on the American calendar than by filling out another income tax form?

Before you start pounding the "back" button, there's nothing for you to worry about! You won't have to pay any more income taxes than what you already have reported on whichever version of IRS Form 1040 you're filing this year. Instead, we've built the following tool to transport you in time back to 1913, where our tool will estimate how much your federal income taxes would be if that year's income tax rules still applied.

Why 1913? That's the year the Internal Revenue Service first issued its infamous Form 1040. We've modeled our tool after the first page of the original Form 1040, which back then, consisted of just four pages:

  • The summary sheet modeled below (Page 1),
  • the Gross Income calculation sheet (Page 2),
  • the General Deductions sheet (Page 3), and finally,
  • one page of Instructions (Page 4).

Yes, you read that right. Paying U.S. income taxes used to only require one page of instructions!

We'll make it even easier. All you need to do is to enter the indicated data (shown in boldface type, in the rows with a white background), using your figures from this year that should still be very fresh in your memory, and we'll take care of the math! The tool will display its calculated results in the rows with a gray background, where you won't have to worry about entering any values.

If you are accessing this article on a site that republishes our RSS news feed, please click here to access a working version of the tool on our site. Now, if you're ready, let's get to it!...

IRS Form 1040, Circa 1913
Return of Net Income Received or Accrued During the Year Ended December 31, 191_
1. Gross Income (see page 2, line 12)
2. General Deductions (see page 3, line 7)
3. Net Income  
Deductions and exemptions allowed in computing income subject to the normal tax of 1 per cent.
4. Dividends and net earnings received or accrued, of corporations, etc., subject to like tax. (See page 2, line 11)
5. Amount of income on which the normal tax has been deducted and withheld at the source. (See page 2, line 9, column A)
6. Specific exemption of $3000 or $4000, as the case may be. (See Instructions 3 and 19)
Total deductions and exemptions (Items 4, 5, and 6)
7. Taxable Income on which the normal tax of 1 per cent is to be calculated. (See Instruction 3)
8. When the net income shown above on line 3 exceeds $20,000, the additional tax thereon must be calculated as per schedule below:
1 per cent on amount over $20,000 and not exceeding $50,000
2 per cent on amount over $50,000 and not exceeding $75,000
3 per cent on amount over $75,000 and not exceeding $100,000
4 per cent on amount over $100,000 and not exceeding $250,000
5 per cent on amount over $250,000 and not exceeding $500,000
6 per cent on amount over $500,000
Total additional or super tax
Total normal tax (1 per cent of amount entered on line 7)
Total tax liability
Original IRS Form 1040

Here are several excerpts from the instructions for filling out the original IRS Form 1040, which explain some of the math our tool is doing.

Excerpts from the Instructions

3. The normal tax of 1 per cent shall be assessed on the total net income less the specific exemption of $3,000 or $4,000 as the case may be. (For the year 1913, the specific exemption allowable is $2,500, or $3,333.33, as the case may be.) If, however, the normal tax has been deducted and withheld on any part of the income at the source, or if any part of the income is received as dividends upon the stock or from the net earnings of any corporation, etc., which is taxable upon its net income, such income shall be deducted from the individual's total net income for the purpose of calculating the amount of income on which the individual is liable for the normal tax of 1 per cent by virtue of this return.

19. An unmarried individual or a married individual not living with wife or husband shall be allowed an exemption of $3,000. When husband and wife live together they shall be allowed jointly a total exemption of only $4,000 on their aggregate income. They may make a joint return, both subscribing thereto, or if they have separate incomes, they may make separate returns; but in no case shall they jointly claim more than $4,000 exemption on their aggregate income.

Previously on Political Calculations

Haven't had enough taxes yet? Here's a couple of other tools that might be of interest to you!

Image credit: Stable Diffusion DreamStudio Beta: "A greedy Uncle Sam wants to make Americans pay taxes".

Your Paycheck in 2023

Welcome to 2023! Since you've clicked through to this tool, we know you're here to estimate what your take home pay will look like after all those federal income and payroll taxes have been taken out of your paycheck. But first, since it's now in the public domain, here's what 1927 vintage cartoon characters Mutt and Jeff discovered to be the secret of success while working as income tax "experts".

Mutt and Jeff: As Income Tax Experts They Discover the Secret of Success, Douglas Daily Dispatch, 11 March 1927, via Library of Congress

Who knew?! But as anyone who has earned an income without offsetting losses and has paid income taxes knows, what Uncle Sam takes out of your paycheck can be pretty substantial.

How substantial can be affected by several factors. For instance, how much did you invest toward your retirement in a pre-tax 401(k) retirement account at work? Does your employer offer health or dependent care pre-tax flexible spending accounts that you might use this year? Did you get a raise to cope with President Biden's inflation?

Our 2023 paycheck tool can help you find out how the answers to these questions can affect your paycheck and more! If you're reading this article on a site that republishes our RSS news feed, please click through to our site to access a working version of the tool. Otherwise, you're more than welcome to enter whatever numbers you want to consider for what your paychecks might look like in 2023. It all starts... now!

Your Paycheck and Tax Withholding Data
Category Input Data Values
Basic Pay Data Current Annual Pay
Pay Period
Federal Withholding Data Filing Status
Have you filed a new IRS Form W-4 with your employer since 2019?
Number of Withholding Allowances (from your pre-2020 IRS Form W-4 if you haven't)
Extra Tax to Withhold per Paycheck (as requested on your IRS Form W-4)
401(k) or 403(b) Contributions Pre-Tax Contributions (%)
After Tax Contributions (%)
Flexible Spending Account Annual Contribution Data Health Care Spending Account
Dependent Care Spending Account
What if You Had a Raise? Desired Raise (%)

Your "Typical" Paycheck Data
Category Calculated Results Values
Basic Income Data Proposed Annual Salary (Including Raise!)
Typical Paycheck Amount
Federal Tax Withholding Amounts U.S. Federal Income Taxes
U.S. Social Security Taxes
U.S. Medicare Taxes
U.S. Additional "Medicare" Taxes (If Applicable)
401(k) or 403(b) Contributions Pre-Tax Contributions
After-Tax Contributions
Total Contributions
Flexible Spending Account Contributions Health Care Spending Account
Dependent Care Spending Account
Your Paycheck's Bottom Line
Take Home Pay Estimate Basic Net Paycheck Amount
... But, After Social Security's Taxable Income Cap Is Reached, It Becomes (If Applicable, for a Full Paycheck)
... And Then, After Additional Medicare Tax Income Threshold Is Reached, It Becomes (If Applicable, for a Full Paycheck)

The tool's results convey how much money the IRS withholds for federal taxes from each of your paychecks in 2023. There are however a number of factors that will complicate your withholding tax results based upon how much you cumulatively earn during the year.

For example, once your cumulative income reaches $160,200 or higher, you will no longer have Social Security's payroll tax of 6.2% of your income deducted from your paycheck (if you're self-employed, that payroll tax is 12.4%). The tool above is designed to provide withholding tax estimates for the majority of Americans who are employed by others. People making this amount of money don't really get a break however, because they've already been pushed into a higher tax bracket, paying higher regular income tax rates than those paid by over half of all income-earning American households.

There's also the complication provided by the so-called "Additional Medicare Tax" that your employer is required to begin withholding from your paycheck if, and as soon as, your year-to-date income rises above the $200,000 mark. This surtax of 0.9% of gross income was imposed by the "Affordable Care Act" (a.k.a. "Obamacare") in 2010, which is still in effect. Since the money collected through this surtax does not directly support the Medicare program, unlike the real Medicare payroll taxes paid by you and your employer, it is really best thought of as an additional income tax. That additional income tax is not adjusted for inflation, which means that those who must pay it are subject to 1970s-style income tax bracket creep, even though the tax was sold on the claim that it would be limited to only very high income earners.

In the tool above, when the amount of your annual 401(k) or 403(b) retirement savings contributions exceed the annual limits set by law, we've limited the results our tool provides to be those consistent with their statutory limits, and will do so as if you specifically set the percentage contributions for these contributions with that in mind. Our tool does not consider whether you might take advantage of the "catch-up" provisions in the law that are available to individuals Age 50 or older, which increase those annual contribution limits by as much as $7,500 in 2023.

Elsewhere on the Web

There are other salary and hourly paycheck calculators like this on the Internet, including the very well done tools available at PaycheckCity's State Salary Paycheck Calculators allow you to determine the amount of state income tax withholding that will be taken out of your paycheck in addition to what the federal government will take out. Payroll processing giant ADP also has a salary paycheck calculator that will give you good results. Overall, we find the format of PaycheckCity's calculators to be more user friendly, but ADP's version has the benefit of having an all-in-one user interface.

If however you live in one of the nine states that have no personal income tax (Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, or Wyoming), our tool above will provide you with a very good estimate of your actual take-home pay after Uncle Sam has left his greasy fingerprints all over it.

Previously on Political Calculations

We've been in the business of calculating people's paychecks (not including state income tax withholding) since 2005!

How Much of Your Income Goes to Pay Taxes?

Tax Man by Jon Tyson via Unsplash -

Once again, American taxpayers are being asked to perform a grim annual ritual. Or else you'll be paid a visit by the dreaded tax man.

The grim ritual is the annual filing of federal income tax returns. And in all but nine states, they'll also have to file state income tax returns.

But that's nowhere near all the taxes that Americans have to pay. As an American, did you ever wonder how much of your income goes to pay all the taxes you pay? It's not just federal and state income taxes. That can include local income taxes, Social Security and Medicare (FICA) taxes, property taxes, utility taxes, sales taxes, excise taxes, etc.

What percentage of your income is going to pay all those taxes?

Answering that question is why we've built the following tool. It identifies the major taxes most Americans will encounter during the course of a year and can be used to estimate how much of your annual income is really sucked up by governments at every level you might encounter. If you're reading this article on a site that republishes our RSS news feed, please click here to access a working version of the tool! And if you're already here, you can get started by entering any numbers of interest into the tool or running the default scenario we've entered. Let's get to it!

Income Data
Input Data Values
Your Household Income
Income and Payroll Taxes
Local (County and/or City)
Social Security
Property Taxes
School District
Utility Taxes
Water / Sewer / Stormwater
Natural Gas
Telephone / Mobile
Cable / Internet
Solid Waste / Trash
Other Utility Taxes
Sales and Excise Taxes
Other Sales and Excise Taxes

How Much of Your Income Goes to Pay Taxes?
Estimated Results Values
Total Taxes Paid
Your Effective Tax Rate

For the default example, we've set the annual income to be a little under the median household income for the United States as of December 2021, so it represents an income that half of American households make more than, and half of American households make less than.

For fun, we set our hypothetical median income earning household in Philadelphia, Pennsylvania, where residents are subjet to federal, state, and local income taxes. Since the city and county for Philadelphia is one and the same, we've only entered taxes paid at the county level.

We also set our median household up in a home that cost $304,000 in 2021, which happens to be the median sales price of a single family home in Philadelphia, adjusting the property taxes accordingly, including the city's school district taxes.

But wait, there's more! Our median income-earning household will pay water/sewer/stormwater, electricity, natural gas, telephone/mobile, cable/internet, solid waste/trash, and other utility taxes!.

Think that's all? Guess again! There are sales taxes to be paid too, for the state, county and/or city. There's also excise taxes like those for gasoline and others, which are paid by those who pay for alcohol, cigarettes, soda, parking, etc. There are so many we can't easily incorporate them into our tool and keep its user interface manageable, which is why we've had to add categories for "other" in a couple of spots!

Just for the record, we've omitted things like sales taxes for real estate and vehicles, mainly because they're usually not regular annual events for most households.

So how much of a median income earning household's income would be consumed by taxes if they lived in Philadelphia? Our tool conservatively estimates 37.3%.

How does your household compare to that? Would living somewhere else make a big difference? These are questions our tool can help you discover. Go ahead. Take it for a test drive. The Tax Man already has.

Image credit: Photo by Jon Tyson on Unsplash.

What’s the Substitute for Sugary Soft Drinks?

Coca-Cola Photo by Omar Elmokhtar Menazeli via Unsplash -
Miller High Life Photo by Waz Lght via Unsplash -

Imagine this scenario. Public health advocates campaign for your city to impose a tax on sugary beverages. They claim it will improve the public's health through fighting obesity by making soda and other soft drinks made with sugar more costly to buy, forcing budget-minded consumers to substitute much lower calorie containing beverages. Your city's politicians, always happy to get more tax revenue, go along with their scheme. How do you think consumers of sugary soft drinks in your city will respond?

If you answered they will drink more calorie-laden alcohol-based beverages, you're right!

The latest proof that consumers substitute beer and liquor for sugar-sweetened soft drinks comes to us from Seattle. In December 2017, the city imposed a unique $0.0175 per ounce tax on beverages containing calories from sugar, but not on beverages made with non-calorie-laden sweeteners. For example, consumers buying a two-liter bottle of Coca-Cola would pay an additional tax of $0.35 that consumers of the same size bottle of Diet Coke or Coke Zero would not.

At first glance, you might think consumers of Sugar-Sweetened Beverages (SSB) would choose to switch to the sugar-free versions of their previously preferred soft drink or to water to avoid having to pay so much more for it.

But that's not what happened according to a peer-reviewed study published in PLOS ONE, which found that the tax "induces substitution to alcoholic beverages". More specifically, the consumers preferred substitute wasn't sugar-free beverages. It was beer, whose sales rose by 7% relative to those of the demographically similar city of Portland, Oregon, which didn't impose a soda tax:

There was evidence of substitution to beer following the implementation of the Seattle SSB tax. Continued monitoring of potential unintended outcomes related to the implementation of SSB taxes is needed in future tax evaluations.

How many competent public health advocates do you suppose would push for new or expanded soda taxes knowing that real life consumers are more likely to shift to alcohol-based beverages with equivalent levels of calories instead of water or low-calorie sugar-free soft drinks? Not only do they miss any benefit from reducing calories consumed among the public, higher alcohol consumption comes with the "higher risk of motor accidents/deaths, liver cirrhosis, sexually transmitted diseases, crime and violence, and workplace accidents" to the public's health.

Then again, if you're a long-time reader of Political Calculations, you could have easily predicted that from our analysis of what happened to alcohol sales in Philadelphia after that city's soda tax went into effect.

Image credits: Coca-Cola Photo by Omar Elmokhtar Menazeli on Unsplash. Miller High Life Photo by Waz Lght on Unsplash.


Lisa M. Powell, Julien Leider. Impact of the Seattle Sweetened Beverage Tax on substitution to alcoholic beverages. PLOS ONE 18 January 2022. DOI: 10.1371/journal.pone.0262578.

Baylen Linnekin. Study: Seattle's Soda Tax Has Been Great for... Beer Sales? Reason. [Online Article]. 12 February 2022.

Previously on Political Calculations