A taxing situation, but is it reality?

Many American’s perception of the taxes they pay is seriously distorted. Many seem to believe that withholding from their pay is the taxes they actually pay or that taxes due at year end reflect higher taxes rather than likely under withholding.

A major misunderstanding is that the tax bracket they are in represents their real tax rate. I know taxes are complicated, but not that complicated. 

I conducted a simple exercise. Using several AI tools I calculate the 2026 federal income tax for a household with two young children earning the US median income.

• Married filing jointly
• Two children who qualify for the full Child Tax Credit
• Taking the standard deduction
• Only wage income (no capital gains or other special income)
• No itemized deductions or other tax credits

I used $82,500 household income. The estimated federal income tax owed was about $1,200 or an effective tax rate of 1.454%

I bet if you asked someone at that income level their perception of income taxes would not match the reality. 

Sure it’s just one example, but the United States has one of the lowest overall tax burdens among developed (OECD) countries, typically ranking near the bottom—around 31st–32nd out of 38 OECD members—when measured by total tax revenue as a percentage of GDP. Most countries use a VAT in addition to income taxes. 

Given the fiscal state of the Country, one could make a logical argument for higher taxes-but I wouldn’t suggest it, most people feel they pay too much already.