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TAXES, INFLATION HURT FAMILIES

The purchasing power of a U.S. family's income fell dramatically in 1990 due to inflation and direct federal taxes, the Tax Foundation says. A family with two wage earners and two children experienced a $614 decline in real income, says the non-profit research group. This was the biggest annual decline since 1981. Significant gains for the median family had been achieved during the 1980s, when income rose an average of $762 per year between 1982 and 1987, the group says.

The two-earner family that made $29,672 in 1982 now earns an estimated $51,421. But the real value of that $21,794 increase was slashed by direct federal taxes and inflation to a net gain of only $3,228, the Tax Foundation says.

Although the amount of income taken by the federal income tax has declined during the period, the amount take by Social Security taxes has increased. When combined with inflation, the family's real gain in income over the 10-year period was only 9 percent.

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