Where Your Taxes Go
In today’s Washington Times, Brian Riedl has a great column detailing just where your tax dollars go.
As Riedl notes, in 2007 the Federal Government will spend $ 24,106 per household. Here are just a few examples of where that money goes:
Social Security/Medicare: $8,301. The 15.3 percent payroll tax, split evenly between the employer and employee, covers most of these costs. This system can remain sustainable only if there are enough workers to support all retirees, which is why it risks collapsing under the weight of 77 million retiring Baby Boomers. If nothing is done, taxes eventually will need to rise by $11,651 per household (adjusted for both inflation and rising incomes) to pay all promised benefits.
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Anti-poverty programs: $3,550. Nearly half of this spending subsidizes state Medicaid programs that provide health services to poor families. Other low-income spending includes: Temporary Assistance for Needy Families (TANF), food stamps, housing subsidies, child-care subsidies, Supplemental Security Income (SSI) and low-income tax credits. Despite recent rhetoric about “cuts for poor,” federal anti-poverty spending now tops 3 percent of gross domestic product (GDP) for the first time ever, and state and local governments add another 2 percent of GDP.
Interest on the federal debt: $2,071. The federal government is $9 trillion in debt. It owes $5 trillion to public bond owners, and the rest to other federal agencies (mostly to repay the Social Security trust fund, which lawmakers raid annually). Despite rising debt, record-low interest rates have limited costs. As interest rates rise back to normal levels, these costs will spike.
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Community and regional development: $282. The doubling of spending in this category since 2004 comes from the Federal Emergency Management Agency (FEMA), which is financing much of the Hurricane Katrina relief.
So, as you fill out that 1040 this week, ask yourself if you’re getting your money’s worth, and whether it’s just possible that you could find better ways to spend that $ 24,106.
