Today – and I hope this does not come as a surprise to any of you – is tax day, when we are required to settle our bills with the federal government for the year 2012. Given how much we pay to Washington every year, it seems only fair that we ask for a receipt.
The White House and research organizations including Third Way have made it easy to do just that: Go to their online widgets and input a little tax and income information, and they will tell you just what you bought with your federal tax dollars. The widgets all operate on the same principle. They take the amount you paid in taxes and then divide that money up into separate piles that are proportionate to the spending categories of the federal budget.
Let’s say that you paid $20,000 in income taxes last year. According to the White House receipt, you would have spent about $7,000 on defense, including the military operations in Afghanistan and Iraq. The second-biggest category is health spending, on programs like Medicaid and Medicare. That accounted for about $6,400. After that comes “job and family security,” which includes unemployment insurance and programs for the working poor, which you spent about $5,000 on last year. Net interest on the debt is also a major category, accounting for about $2,300.
Then, there are many much smaller categories. Humanitarian aid, for instance, cost you only $228 out of your $20,000. You spent about $1,300 on programs for veterans and $190 on agriculture. Education and job training cost you about $940 and NASA about $170. Disaster response worked out to about $120.
There are a few things to note here. One is that “mandatory” spending – including government funding for Social Security, Medicaid, Medicare and interest on the debt – and military spending together significantly outweigh “discretionary” spending. That is upside down to many Americans’ perceptions of the budget. (It is also worth noting that the White House separates out tax revenue for and spending on Social Security and certain parts of Medicare.)
The second is that all those numbers add up to more than $20,000. If you go to the White House calculator and say you paid $5,000 in income taxes, it will break it down into an equivalent $5,000 in spending. But that doesn’t really make sense. Last year, Washington spent far more than it took in – about $1.1 trillion more. That means that for every tax dollar it collected, it spent about $1.43.
By the same logic, your $20,000 in income taxes translated into about $28,600 in spending. In the numbers above, I corrected for that discrepancy, particularly given that you will end up paying for that deficit in the form of higher taxes, lower spending and higher interest payments in the future.
Article source: http://economix.blogs.nytimes.com/2013/04/15/what-are-your-tax-dollars-buying/?partner=rss&emc=rss
