Americans Spent More on Taxes Last Year Than on Personal Necessities

Yikes. New consumer spending data from the Bureau of Labor Statistics (BLS) provides some sobering perspective on how much Americans are paying in taxes. The data covers consumer spending across a wide variety of categories in 2021. Overall, taxes accounted for about 25 percent of average consumer spending.

The BLS measures spending per “consumer unit,” which it describes as “either (1) all members of a particular household who are related by blood, marriage, adoption or other legal arrangements; (2) persons living alone or sharing a household with others or living as a roomer in a private home or lodging house or in a permanent living quarters in a hotel or motel, but who is financially independent; or (3) two or more person living together who use their income to make joint expenditure decisions .”

On average, each “consumer unit” paid more than $16,000 in taxes last year. This outpaces average spending on food, clothing, education, and health care combined.

The mean for total spending per unit on health care, food, education, and clothing was $16,721.42. This included an average of $8,289.28 on food, $5,451.61 on health care, $1,226.14 on education, and $1,754.39 on apparel.

The mean for total spending per unit on taxes was $16,729.73. This included $8,561.46 in federal income tax, $2,564.14 in state and local income taxes, $2,475.18 in property taxes, $5,565.45 in Social Security deductions, and $105.21 in other taxes, offset by an average stimulus payment of $2,541.71.

In addition to this disturbing tidbit, the new BLS data contains a wealth of other information on American spending habits and offers an interesting glimpse at recovery—and inflation—during the second year of the coronavirus pandemic.

“Average annual expenditures for all consumer units in 2021 were $66,928, a 9.1-percent increase from 2020,” BLS reports. “During the same period, the Consumer Price Index…rose 4.7 percent, and average income before taxes increased 3.7 percent.”

The highest expenditure category was housing, at an average $22,623.55 per consumer unit (including property taxes). Major spending categories aside from housing, food, health care, education, and clothing included transportation ($10,961.18), utilities/fuels/public services ($4,223.49), entertainment ($3,567.89), household operations ($1,638.42), and personal care products and services ( $770.51).

Spending was up last year in all sorts of categories that had been depressed by the pandemic in 2020. For instance, spending on entertainment was up nearly 23 percent over 2020 and up 15.5 percent from 2019.

The average spending per consumer unit on alcohol was $553.77, up 15.9 percent over 2020 (but still below 2019 levels). “The increase was driven by alcohol away from home spending, up 69.4 percent, which was offset by a decrease in alcohol at home spending, down 7.9 percent,” the BLS reports.

Overall, spending was up across all income categories. The highest quintile of earners had the most increase in spending (up 11.6 percent), while the second-lowest quintile had the smallest increase (up 4.6 percent). “In each quintile, the increase in total spending outpaced the increase in income,” notes the BLS. “Overall average annual income before taxes rose 3.7 percent in 2021, while expenditures increased 9.1 percent.”

Income rose between 3 and 4 percent for the top three income groups but just 0.6 percent for the second lowest income group. It decreased 0.4 percent for the bottom quintile.


FREE MINDS

Another state Libertarian Party is reportedly disassociating from the national Libertarian Party—this time by dissolving entirely. “The voice of the national party has been used to so thoroughly damage and denigrate the name and reputation of the Libertarian Party that the Libertarian Party of Virginia can no longer engage effectively in productive public information activities,” he said in a resolution shared by Andrew Craig on Twitter.

The party’s former affiliates in New Mexico and Massachusetts have recently announced their independence from the national organization, but without dissolving themselves.

Read more about the Libertarian Party’s internal issues (following its takeover by the Mises Caucus) in this recent piece by Reason‘s Brian Doherty.


FREE MARKETS

San Francisco decriminalizes hallucinogenic plants. San Francisco’s Board of Supervisors last week voted unanimously to decriminalize entheogenic plants and fungi. “An entheogen, which literally translates to experiencing divine within, describes a psychoactive substance or preparation derived from plants or fungi and used in religious, spiritual, or ritualistic contexts,” explains Decrim SF on its blog.

“The unanimous resolution urges that individuals who cultivate entheogens and transmission for use in religious, spiritual, healing, or personal growth practices, either for their sole individual use or for the shared use of themselves and other practitioners should be deprioritized from arrest or prosecution, the organization said. “Similarly, the Resolution urges deprioritizing arrest or prosecution when people’s possession and/or cultivation of entheogens becomes evident to [city police] officers during an encounter for reasons other than possession.”


FOLLOWUP

The New York Times offers more details on the murder of Las Vegas reporter Jeff German and the arrest of a local elected official, Robert Telles, as a suspect:

The police said they had not recovered a murder weapon but that they did find Mr. Telles’s DNA at the crime scene. Investigators also searched Telles’s home and car and found a hat and shoes that matched those worn by a person seen on surveillance video of the scene. Both the hat and shoes had been cut up, the police said, and the shoes had blood on them.

The man pictured on the surveillance video was wearing an orange construction vest, gloves and a large straw hat that hid his face. The police said Mr. Telles had been trying to conceal his identity. A series of road construction projects were taking place near Mr. German’s home last week, and many workers wore similar outfits.

Before he was arrested, Mr. Telles ignored reporters’ questions outside of his home.


QUICK HITS

• An Alabama woman was jailed for three months because she smoked pot while pregnant. (More on Alabama’s history of doing this here.)

• After being pulled last week, Sen. Amy Klobuchar (D–Minn.) has brought back her plan to take from tech companies to pay for newspapers:

• “Payment processor Visa announced Saturday its plans to separately categorize gun shop sales, joining Mastercard and American Express, which have already said they would categorize purchases at firearm stores,” reports Fox Business.

• Wild fires are once again raging in Oregon and Northern California.

• Goodbye, globalization?

• The death of Queen Elizabeth II “opens the floodgates on self-rule campaigns,” suggests Politico.

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