Greetings, leeches!

Is your household pulling its own weight, federally speaking? The 2004 tax season is just about upon us, so it's a convenient time to find out. For Federal figures, I'm going to rely on Treasury projections for the full fiscal year, found here. What we'll do is look at overall receipts from income tax and payroll taxes, divide by the U.S. population, and compare the per-capita receipts to your per-capita household payments. Are you pulling your own weight, or are you a tax slacker?

On the government side of the ledger, we're looking at $913.1 billion in individual income taxes. Add $577.7 billion in "employment and general retirement (off-budget)." I take this to mean the Social Security portion of payroll taxes, which are neither considered "income" taxes nor considered a federal budget item. Then there's "employment and general retirement (on-budget)," which must be Medicare tax receipts, at $169.0 billion. The ratios look correct: the Medicare rate is 1.45% and Social Security is 6.2%, but the Soc contributions are capped while Medicare's are not. This is the bulk of what individuals pay into the system. We're not going to delve into the smaller line items, like estate taxes, since (1) they're small, and (2) as you're reading this, you're probably alive. So total projected federal receipts from individuals: $1.6598 trillion. Divide this by 294 million people in the United States.

I get $5646 per capita. I'd peek at your answer, but you're really, really far away at the moment, and the teacher is watching.

Consult your pay stubs for 2004. Add up your Social Security and Medicare contributions, then double that figure. Since we included all Soc and Med receipts as part of individual taxes above, we must consider the "employer portion" to be your tax on this side of the ledger as well. Add your federal income tax paid. If there's more than one of you at home, repeat for each person and take the sum. Divide by the number of individuals. Is the final figure above 5646? Yes? Then right now you are a net contributor to the work of the federal government. Congratulations, I guess. If not, then I will gently point out that the government is getting its work done in spite of you, using someone else's earnings. (Please do better next year!)

It's a considerable amount of money you have to earn to just break even with federal average collections. My spreadsheet here says that if you're a married couple with two kids in Wisconsin with a $120k mortgage on a $180k house and contributing 10% toward your retirement, your household gross has to exceed $106k for your four-person family to be pulling its weight. By comparison, the dual-income no-kids couple (somewhat smaller house, no freeloading offspring) is in the black after $54k.

Another eye-opener is how much the typical taxpayer is paying in his payroll taxes. And again, when I talk about payroll taxes, I include the "employer portion" as part of what you are paying. The fact that half the tax never appears on your pay stub is immaterial. It's still all money that you earn from your employer and goes into the U.S. Treasury. The above breakeven two-earner couple with two kids pays only $8,160 in federal income tax because of four exemptions, $16k in itemized deductions and the child tax credits. But their payroll tax contributions are a whopping $14,600.

Conservative radio talk show hosts make lots of hay in talking about how the top ten percent of earners pay such-and-such a percent of income taxes, and those statistics are true as far as they go. But it rather overstates the case by focusing solely on income tax, and ignoring the enormous flow of payroll tax money that the low-income earner is contributing to. Even so, when a household of four has to gross $106k to be average taxpayers, it does again demonstrate the extent to which the high earners carry the rest of the populace.

And that, I suppose, is the flip-side to "tax cuts for the rich" rhetoric: "Tax cuts for the leech," instead?