Taxes, Inflation Have Hurt Family Budgets : Income: Study finds that money sent to government exceeds that going to housing, food and medical care combined.

Since the early 1980s, our wages have risen and the economy has grown, which leaves many of us wondering where the money has gone.

We can show, for example, that the median income of a “typical family,” a two-earner, married couple, has nearly doubled from $26,879 in 1980 to $51,883 in 1993, but we can also show that what’s left to spend is only $4,504 more.

Those numbers tell much about why, according to consumer studies, people sense they aren’t making financial progress. But they leave the big question unanswered: What’s eating into the family budget?

Is it food? Not really. As a percentage of the typical family’s expenses, food costs are actually lower than in 1980.

Housing and household expenses? Again, no. They’ve risen in total, but not as a percentage of total expenses.

If you say medical care, you’re getting close, because those costs have indeed risen in total and as a percentage of expenses--from 7% in 1980 to 10.3% of expenses in 1993.

The answer, as you might now surmise, is that most of the missing money has been absorbed by inflation and taxes.

While pretax income has risen 93% since 1980, it was nearly matched by a 90% rise in total taxes and a 73% increase in inflation. As a result, the 93% income hike settles at a mere 15%.

These figures come from the draft of a special report by the Tax Foundation, self-described as nonpartisan and nonprofit, which has monitored tax and fiscal activities at all levels of government since 1937.

The study shows that federal, state and local taxes take 40.4% of a typical family’s income, a bigger bite from the family income pie than housing, food and medical care combined.

Especially significant in explaining the conservative mood of consumers over the past couple of years is the finding that real, after-tax income--in spite of a slight increase this year--remains below that of 1988.

The report shows that of the $25,004 median-income increase since 1980, taxes depleted the amount by $11,454. Tax categories included in the amount are federal income, Social Security, other federal and state and local taxes.

Especially large increases occurred in Social Security--12.3% to 15.3%--and at the state and local level--11.4% to 12.6%.

Economist Chris R. Edwards said the report counts both the 7.65% employee contribution to Social Security and the matching amount from employers because the effect of the latter is seen as lowering pay by the same amount.

The report shows that state and local taxes, estimated at $6,537 in 1993, rose in every year since 1980, when the total was $3,064, whereas federal income taxes actually fell in three years during that time.

While the study examines mainly the past, it does briefly touch on the future, noting that higher payroll taxes and possible health care levies may wipe out any real increases in income from a strengthening of the economy.

Those are the facts, says the Tax Foundation, so wonder no more why you feel so poor.