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Taxes Cost More Than Food And Clothing

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Americans are, on average, spending more on taxes than on food and clothing, according to new figures.

The Bureau of Labor Statistics revealed that while $10,489 was shelled out for federal, state and local taxes in 2016, $9,006 went on food and clothing, Fox News reported.

The figures also illustrate how federal income tax bills have increased over recent years. Overall, average tax bills have risen by more than 40 percent since 2013.

The numbers come as President Donald Trump initiates a push to reform the tax system. In a speech on Aug. 30, Trump called for tax codes to be simplified.

"This enormous complexity is very unfair," said Trump. "It disadvantages ordinary Americans who don't have an army of accountants while benefiting deep-pocketed special interests."

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Before he can make changes, Trump will have to reach an agreement with fellow Republicans in Congress.

"We need a tax code that is simple, fair and easy to understand," said Trump, reports NPR. "And that means getting rid of loopholes and complexity that primarily benefit the wealthiest Americans and special interests. Our last major tax rewrite was 31 years ago. It eliminated dozens of loopholes and special interest tax rates, reduced the number of tax brackets from 15 to two, and lowered tax rates for individuals and businesses. Since then, tax laws have tripled in size."

Making the changes called for by Trump could prove difficult. Thomas Cooke, a tax expert at Georgetown University, noted that a number of groups exist that would oppose attempts to remove deductions.

"On every single item, there's a group out there ready to battle," Cooke told The Associated Press.

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One of the most expensive exemptions for the government is the deduction of interest paid on mortgages. In the budget year that ended Sept. 30, 2016, this benefit cost the government an estimated $77 billion. Around 28 million Americans take advantage of the deduction.

Trump also wants to reduce corporate tax rates and encourage companies to bring back wealth from overseas.

"Today we are still taxing our businesses at 35 percent," added Trump. "And it's way more than that. And think of it -- in some cases way above 40 percent when you include state and local taxes in various states. The United States is now behind France, behind Germany, behind Canada, Ireland, Japan, Mexico, South Korea and many other nations also."

NPR pointed out that when deductions for businesses are taken into account, the effective corporate tax rate in the U.S. is 18.6 percent, which is slightly lower than in Japan but slightly higher than in Germany.

Sources: Fox News, AP via CBS News, NPR / Featured Image: Pixabay / Embedded Images: Office of the Speaker/Wikimedia Commons, Office of the President of the United States/Wikimedia Commons

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