Americans spent more money on expenses like food, clothing and healthcare in 2021, while the average tax bill fell by $400, compared to the previous year, as the cost of living rose under Biden.
The latest report from the Bureau of Labor Statistics found that in 2021, Americans spent about $16,700 in taxes with the IRS while giving over $15,500 for food, clothing and healthcare.
And although people still spend more on taxes than living expenses – the gap between the two has narrowed as of 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 healthcare combined, less than $16,729 spent on taxes
The BLS recorded the expenditure costs of an average ‘consumer unit’ or an economically 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 healthcare.
Meanwhile, federal and state, social security, estate and other taxes totaled $16,729.73, according to the BLS.
The difference between the two expenses was less than half of the 2020s, where it was about $3,200.
In 2019 the difference was around $3,500, and in 2018 it was almost $4,000. That was nearly double the $2,200 difference recorded in 2017.
The BLS report comes as the agency found that average income per consumer unit in 2021 rose 3.7 percent to $87,432, while spending jumped 9.1 percent to $66,928.
The report concludes that the average American consumer was unable to keep up with the rising cost of living impacted by rampant inflation that remains persistently high.
It underscores President Joe Biden’s claims earlier this week that his “bold and decisive” action over the past two years has led to “significant progress.”
The US has seen negative returns in GDP for the past two quarters, signaling that the nation is already in a recession
A recent Gallup poll found that the share of Americans who say inflation is causing them financial hardship has risen from 49 percent in January to 56 percent, with rising prices forcing 69 million households to cut back.
A worrying 12 per cent of the survey’s 1,570 respondents said they experienced “severe hardship” that lowered their standard of living – an increase on the 9 per cent who said so at the start of 2022.
Although gas prices have fallen to $3.78 a gallon and inflation fell to 8.5 percent in July, the economy and rising prices remain a major concern for millions of cash-strapped voters heading into November’s midterms.
“With high inflation persisting for over a year, a majority of Americans now say they are experiencing financial hardship from higher prices,” the report said.
“Lower-income Americans were mainly affected early on, but most middle-income Americans and a significant minority of higher-income Americans are now feeling the brunt of higher prices.”
Many more middle- and upper-income Americans are struggling with higher prices than was the case last November
Respondents to recent polls from KFF and The Wall Street Journal have cited the economy and inflation as one of their priorities ahead of the midterm elections
Poor homeowners are more likely than others to experience severe hardship — 26 percent of those with an annual household income of less than $48,000 say prices are seriously hurting their families.
That compares with 12 percent of middle-income Americans and 4 percent of the wealthy.
Reports of economic hardship also differ by party allegiance. Republicans (67 percent) are far more likely than Democrats (44 percent) to say inflation hurt their households — likely an effect of Democrats controlling the White House and Congress.
In response to rising prices, the cash-strapped are cutting back on travel, groceries, vacations, gas and restaurants, as well as buying cheaper produce and even growing vegetables at home, according to Gallup.