This month’s featured article from TEF.

Where Do Your Federal Tax Dollars Go? 

 by Amy K. Frantz

Now that you have paid your federal income taxes, or at least, hopefully, received an extension, you may be wondering what the federal government plans to do with all of the tax dollars it has collected.  The Daily Signal has broken it down for you, so you can see where and how the federal government is spending your money.[1]

 

Where Does All the Money Go?

Where Does All the Money Go?

The largest portion of every tax dollar received by the federal government, 26 percent, goes to Medicare, Medicaid, and other health programs such as Obamacare.  This piece of the pie chart will soon grow much larger, “with Obamacare spending alone…expected to grow the major entitlement budget by 44 percent over the next decade.”[2]

Social Security makes up nearly as large a portion, at 24 percent.  Income security and other benefits, which include “federal employee retirement and disability, unemployment benefits, and welfare programs such as food and housing assistance,”[3] make up 19 percent.  Defense spending makes up 17 percent, transportation spending makes up 3 percent, K-12 education spending by the federal government makes up 1 percent, and all other federal spending makes up the remaining 3 percent.

Net interest is 7 percent.  If the federal government did not have debt on which it must pay interest, it would have seven more cents of every tax dollar to spend on other programs or it could return that seven cents that is no longer needed to the taxpayers!

Amy K. Frantz is Vice President of Public Interest Institute.

The views expressed herein are those of the author and not necessarily those of Public Interest Institute or Tax Education Foundation.  They are brought to you in the interest of a better-informed citizenry.

[1] Romina Boccia, “The Breakdown of Where Your Tax Dollars Go,” The Daily Signal, The Heritage Foundation, March 17, 2015, <http://dailysignal.com/2015/03/17/the-breakdown-of-where-your-tax-dollars-go/> accessed March 18, 2015.

[2] Ibid.

[3] Ibid.