July 10, 2007
Most people know that how much a person pays in taxes depends on that person's income. And N.C. State University economist Mike Walden says that the tax load also varies by age.
"Based on a new study ... from the Tax Foundation, we clearly do see a pattern of taxes and benefits received from government with age. For example, older Americans -- and most people wouldn't be surprised by this -- get back a lot more from the government than they pay in taxes," explains Dr. Walden, a professor of agricultural and resource economics. "It's because most of these folks are retired. They get back about $5 in government -- from things like Social Security and Medicare -- for every dollar they pay in taxes.
"Middle-aged taxpayers get back less," he adds. "They get back about 70 cents of government benefits for every dollar they pay in taxes.
What may be surprising, Walden continues is that younger folks -– those 25 years old or less -- actually get back more from the government than they pay in taxes. "They get back about $2 in government benefits –- primarily public assistance and educational aid -- for every dollar they pay in taxes," he reports.
"So clearly we do see a pattern of tax payments and receipts from government with age," he concludes. "When you are young and very old you tend to get more back from the government than you pay in; when you are middle age, you tend to pay in more than you get back."
Posted by deeshore at July 10, 2007 08:00 AM