Americans spent more money on things like food, clothing and health care in 2021, while the average tax bill fell $400 from a year earlier, the cost of living having soared under Biden.
The latest Bureau of Labor Statistics report found that in 2021, Americans spent about $16,700 on IRS taxes while shelling out about $15,500 on food, clothing, and health care.
And while people still spend more on taxes than on living expenses — the gap between the two is down from 2020, when Americans spent $17,148 on taxes and $13,927 on other expenses. It is also the smallest difference between the two costs since 2017.
On average in 2021, US consumer units spent $15,495 on food, clothing and health care combined, less than the $16,729 spent on taxes
The BLS recorded the expenditure costs of an average “consumption unit” or a financially independent family or individual. In 2021, the agency reported 133,495 consumer units in the United States.
On average in 2021, US consumer units spent $8,289.28 on food, $1,754.39 on clothing, and $5,451.61 on health care.
Meanwhile, federal and state, Social Security, property and other taxes totaled $16,729.73, according to the BLS.
The gap between the two expenses was less than half that of 2020, when it was around $3,200.
In 2019 the difference was around $3,500 and in 2018 it was almost $4,000. That was almost double the $2,200 difference recorded in 2017.
The BLS report comes as the agency found that average income per consumption unit in 2021 rose 3.7% to $87,432, while spending jumped 9.1% to $66,928. dollars.
The report concludes that the average American consumer has failed to cope with the rising cost of living, impacted by runaway inflation that remains consistently high.
This underscores claims by President Joe Biden earlier this week that his “bold and decisive” action over the past two years has spearheaded “meaningful progress.”
The United States has recorded negative GDP returns for the past two quarters, signaling that the country is already in recession
A recent Gallup survey found that the share of Americans who say inflation is causing them financial hardship rose from 49% in January to 56%, as rising prices forced 69 million households to make budget cuts.
A worrying 12% of the survey’s 1,570 respondents said they were experiencing “serious difficulties” which reduced their standard of living – an increase from the 9% who said so at the start of 2022.
Even though gasoline prices fell to $3.78 a gallon and inflation fell to 8.5% in July, the economy and rising prices remain a top concern for millions of voters cash-strapped ahead of the November election.
“With high inflation that has persisted for more than a year, a majority of Americans now say they are struggling financially because of rising prices,” the report said.
“Low-income Americans were primarily affected at first, but most middle-income Americans and a substantial minority of high-income Americans are now feeling the pressure of rising prices.”
Many more middle- and upper-income Americans are grappling with higher prices than was the case last November
Respondents to recent KFF and Wall Street Journal polls cited the economy and inflation as one of their priorities ahead of the midterm elections
The poorest households are more likely than others to experience severe hardship – 26% of those with an annual household income of less than $48,000 say the prices are seriously hurting their families.
That compares to 12% of middle-income Americans and 4% of the wealthy.
Reports of financial hardship also differ by party allegiance. Republicans (67%) are much more likely than Democrats (44%) to say inflation was hurting their households – likely an effect of Democrats’ control of the White House and Congress.
In response to rising prices, cash-strapped people are cutting spending on travel, groceries, vacations, gas and restaurants, buying cheaper produce and even growing vegetables at home, according to Gallup.
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