According to a recent analysis by Self Financial, the average American will pay an estimated $762,272 in total taxes over their lifetime. (This actually represents a roughly 45% increase from the 2024 estimate of $524,625 in lifetime taxes and I'm sure it will go up form there.) The study looked at various taxes Americans pay throughout their lifetimes across several major categories: Federal and state income taxes, Property taxes, Sales taxes and Vehicle-related taxes.
As no surprise, income taxes make up the largest share of the lifetime tax burden. (Their analysis estimates that the average U.S. taxpayer pays about $532,910 in federal and state income taxes over a lifetime.)
According to the study, Property taxes add roughly more than $145,000 over a lifetime.
Then there are the taxes we often pay without thinking much about them, such as sales taxes at the register and taxes tied to car ownership. For instance, the study data show that "owning the most popular car (i.e., a Ford F-Series) will cost an additional $31,817 in tax payments."
These taxes might seem relatively small in any given transaction, but over a lifetime the average U.S. taxpayer will pay an estimated 33.6% of their earnings in taxes, the study says.
What about state taxes?
Where you lives can impact your tax payments. This latest analysis reveals significant differences due to income levels, housing costs, tax structures, and spending patterns. As an example, residents of New Jersey face the highest estimated lifetime tax burden. The study projects Garden State residents will pay roughly $1.35 million in taxes over their lifetimes. Other states with high lifetime tax burdens include: Estimated lifetime taxes paid to Massachusetts $1,297,130, to Connecticut $1,249,749, to New Hampshire $1,125,478, and to New York $1,084,561
At the other end of the list, Florida residents have the lowest estimated lifetime tax burden, at about $508,000, the study states. The difference between the highest- and lowest-tax states exceeds $800,000 over a lifetime.
Note: The analysis estimated lifetime taxes by combining federal, state, local, property, sales, and vehicle-related taxes using median earnings, consumer spending, housing, and vehicle ownership data. Researchers assumed a typical working life from ages 22 to 67 and applied current tax rates and spending patterns over an average lifespan of 79.6 years.
There are proposals to eliminate state income tax and property tax in various states. Several states have recently lowered income tax rates or adopted flat-tax systems, while others are debating further cuts to attract residents and businesses. For example, in Missouri, voters will decide in August on Amendment 5, a measure that would phase out the state's individual income tax. Supporters of eliminating the state's income tax argue it would let residents keep more of their earnings. Some opponents warn that Missouri might need to rely more on other taxes, e.g., sales taxes, to make up for lost revenue and fund public services.
Property taxes have also become a major target in recent years, particularly in states where rising home values have pushed up tax bills. Here in Florida, lawmakers are considering a constitutional amendment that would increase the state's homestead exemption for non-school property taxes to $250,000 in 2028 and beyond (It is currently $50,000). Supporters of the proposal for November's vote say it would help homeowners and gradually eliminate property taxes on homesteaded properties. Critics, however, are concerned about how local governments would replace lost revenue for essential services like public safety and infrastructure.
Then there are several members of Congress that have introduced plans to exempt certain income levels from federal income tax. For instance, The Working Americans' Tax Cut Act, proposed by Sen. Chris Van Hollen (D-Md.), would eliminate federal income taxes on the first $46,000 for individuals and $92,000 for couples while imposing a surtax on higher-income households and Sen.Cory Booker's (D-N.J.) "Keep Your Pay Act" would increase the standard deduction to effectively eliminate federal income taxes on the first $75,000 of earnings. Neither has gained any traction in Congress and will probably go nowhere.
The bottom line is that until we start electing people who have the guts to do the hard work of reducing the spending in congress and balancing the budget - the tax burdens will continue go up until the day we die and beyond.
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