The Tax Monster Bites Again
Where the gains of the '80s went
The Clinton administration likes to rail against those Gordon Gekko types who made out like bandits in the 1980s while everyone else fell behind; free-marketeers counter with statistics showing every income group getting wealthier over that time. Indeed, the median family income before taxes has almost doubled, from $26,879 in 1980 to an estimated $51,883 in 1993. So where has the money gone? Inflation and taxes. A study by the Tax Foundation shows that real, after-tax income is only $4,471 higher now than it was in 1980. The big culprits: Social Security payroll taxes, which increased from 12.3 percent of income to 15.3 percent, and state and local taxes, which have risen from 11.4 percent to 12.6 percent. New taxes to finance health-care reform could slice even more from our paychecks.