state + fed tax = ~30% of gross...talk about being bent over

 

A combination of probably

high income/high state tax/low deductable expenses/low retirement pretax contribution

But yeah you are getting bent over considering the stuff provided to you by the government is pretty low, and they are running up mounds of debt you will have to pay for on top of it.

 

For me, percentage of gross income:

Gross income - 100%
AGI (gross minus pre-tax investments/benefits) - 85%
Taxable income (AGI minus deductions) - 65%
Income tax (federal only, no state in Texas) - 13%
Social Security - 5.8%
Medicare - 1.4%

Housing - 10% (split between two people)
Misc household expenses - 10% (again, split)
Misc personal expenses - 20%
Savings - 25%

Total - 100.2% (okay, expenses are an estimate )

 

This is the average not the median income. 90% of u.s. households could make less than this (mid 60's) as long as the remaining 10% were to average say 500k+ annually. The mode (income) is usually in the mid 30's if I'm not mistaken. The 2nd and 3rd quartile (inner 50% of income distributions) are probably from the high 20's to the high 30's as well.

 

The highly industrialized world in general spends way too much of their income on "housing". The reason for the quotations is because in reality it's "50% housing/50% debt to maintain your housing". If people were to pay cash for their homes it would be a different story.

 

But where are they supposed to live while they're saving up the money to pay cash for a home?

 

Yeah, but in my head, the average American goes out and blows the extra $4116 on a Waverunner.

It's info from 2007, but this article (particularly the graph on the first page) is pretty telling in a sad way:

http://www.bea.gov/scb/pdf/2007/02%20Febru...0207_saving.pdf

 

That's a really interesting chart.

It'd be interesting to see how those proportions shift with incomes towards the extremes.

Instead of 20.2% spent on housing, we spend 7.8%.

But instead of 6.5% spent on cars, we spend 9.1% (approximate).

 

Or you could look at statistics instead of guessing. Average (2007) was 78,885. 40% of the population made more than 75,000. Exactly how many people made between 75,000 and 7,885 is unknown. But with 25.8% making over $100,00 there obviously can't be 80 to 90% of people making less than the average 78,885. I highly doubt more than 5% make between 75,000 and 78,885, and that means no more than 65% make less than the average household income.

Wealth discrepancy in the US is vastly over rated. It's not equal by any means, but its not the case that a few ultra-wealthy individuals control so much wealth that 90% of people make less than the average as a result of a relative few incredibly wealthy outliers.

 

We are a skew also as we spend about 12.3% on housing/bills/etc, and <1% on cars as we have no pmts and insurance/maint is the only expense ( I will place fuel in a different category)
But agreed the savings is pitiful and the leverage is extreme.