System takes up extremely large amount of space

The Storage tab is known to report incorrectly.Also check by choosing your Mac HD and "Get Info" (command-i). It may be different. Try rebuilding Spotlight index.

How to rebuild the Spotlight index on your Mac - Apple Support

Some of the space may also be from Time Machine Snapshots.

About Time Machine local snapshots - Apple Support

After you've freed up some space download Omni DiskSweeper:

https://www.omnigroup.com/more

DiskSweeper can give you a more accurate read of disk space than Finder or Storage Tab of About this Mac. Itcan also show you the precise size and location of all your files. It will inventory your disk starting from the files that take up the most space. If you want you can even delete files from OmniDisk Sweeper. But be careful some of the items may be important to your system.

Check Mail menu > Window > Connection Doctor. If you have check marked “Log connection activity” turn it off.

For information about the Other category in the Storage display, please see Apple Support Topic

https://support.apple.com/en-us/HT202867

Also, empty the Trash if you haven't already done so. If you use iPhoto, empty its internal Trash first:

iPhoto ▹ Empty Trash

In Photos: File ▹ Show Recently Deleted ▹ Delete All

mattpeng wrote:

Both OmniDiskSweeper and Disk Inventory X rate my hard drive for having about 100gb less disk space available than what About My Mac and Get Info tell me.

I would believe what ODS and DIX are telling you.

When I turned off automatic backups on Time Machine my system storage increased to 127gb.

The increase in storage was probably from TM snapshots.

Edit: I have also deleted all of my recently deleted Photos without any noticeable change to storage (I only had like 12 pictures)

Did you restart?