Your Salary Is Just a Fraction of What You Make

That fraction being about 1/2: Tax Policy Center experts

By Kate Seamons,  Newser Staff

Posted Aug 5, 2013 1:31 PM CDT | Updated Aug 5, 2013 1:55 PM CDT

(Newser) – Howard Gleckman has a news flash for you: You make far more money than you think you do. Writing for the Christian Science Monitor, the Urban-Brookings Tax Policy Center fellow isn't arguing that you're reading your paycheck stub wrong. Rather, the number on that stub is only the half of it—literally. That's because non-salary sources actually account for about half of the average household income, at least, according to his Tax Policy Center colleagues. They've come up with what they refer to as Expanded Cash Income, or ECI, which takes into account a wider range of income sources.

The more obvious additional sources like dividends and interest only make up an average of 11% of our real number. One big overlooked component: employer "fringe benefits," like health insurance and the employer share of payroll taxes, which Gleckman writes "boost our incomes about 11%, even though we don’t pay tax on that compensation." Another: government transfers (Social Security, food stamps, worker's comp, veteran's benefits, etc), which make up 8% of the average ECI. And while the ECI isn't completely comprehensive (Gleckman notes it excludes Medicare and Medicaid), "the bottom line: You probably make more money than you think. And even if it is not taxed, it is still income." Click for his full piece.

You make more than you think.
You make more than you think.   (©)
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