Final answer:
The claim that 25-35% of every dollar goes to taxes is a simplification and varies by income level and location. High-income earners pay a larger percentage in federal taxes, while federal taxes as a share of GDP remain between 17% to 20%.
Step-by-step explanation:
The statement that between 25 and 35 cents of every dollar earned by those working in the United States and earning above a certain level goes toward federal, state, and local taxes is too generalized and does not account for the variability of tax rates across income levels. The federal tax system is progressive, meaning individuals with higher incomes tend to pay a higher percentage in taxes.
For instance, in 2009, the top 1% of households paid an average federal tax rate of 28.9%, but the effective tax rate was at 20.4%. On the other hand, federal taxes as a share of GDP have typically stayed within the range of 17% to 20%. It is important to note that there are also states without an income tax, and state taxes can often be deducted from federal taxes. Each state uses its tax revenue for services like road repair and education.