Our federal government relies on federal taxes in order to finance various public services that are vital to the safety and preservation of our country. Many of us pay our taxes without much thought or question as to where the money is going. However, with changes in tax policies and evolving political leaders it is a good time to inform yourself about the allotment of taxes to break them down and see how your money is being spent,
According to the Center on Budget and Policy Priorities, in the 2016 fiscal year, the federal government spent $3.9 trillion, amounting to 21 percent of the nation’s gross domestic product (GDP). Of that $3.9 trillion, over $3.3 trillion was financed by federal revenues. The remaining amount ($585 billion) was financed by borrowing.
Below we will break up the major area of spending our federal taxes go to:
Social Security: Almost a quarter of our federal taxes go into providing money for social security. Social security is a major source of financial security for the millions of citizens who are either retired, disabled, or the families of those who are retired, disabled, or deceased. It is estimated somewhere around 170 million Americans are paying to Social Security, while 61 million are currently collecting monthly benefits. Close to a quarter of families are receiving some type of income from Social Security.
Medicare, Medicaid, CHIP, and marketplace subsidies: These health insurance companies when combined also account for close to a quarter of our tax budget. The largest chunk of this cost goes directly to Medicare, which provides around 57 million people over the age of 65 or have disabilities with health coverage.
Defense and international security assistance: Defense and security related international involvement makes up for somewhere around 16% of our tax budget. This money goes to our servicemen, our equipment, our travel, and our supporting operations internationally.
Safety Net Problems: Around 10% of our budget is spent supplying safety net programs that work to provide aid to those who are facing financial hardships. This is different than the social security aid because there are no age or health restrictions.
Interest On Debt: Somewhere around 6% of our federal tax budget is spent on paying interest on our borrowed money used to fund the rest of our federal needs.
Sandra King Enrolled Agent
Sandra King is an enrolled agent, empowered by The United States Treasury to prepare your personal or business tax filing. While her services are offered nationwide, Sandra King locally serves the greater Dallas-Fort Worth area, including but not limited to Arlington, Bedford, Colleyville, Euless, Fort Worth, Grand Prairie, Hurst, Mansfield, North Richland Hills, and Richland Hills.
Euless, TX 76040
Phone: (800) 503-1343