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Ever wonder where and how your tax dollars go? Let’s look at where your money goes in viewing a common receipt where your have purchased some items in each of the following departments in a store.

  • National Defense– Personnel salaries and benefits; ongoing operations and supplies; research and development; construction and support; Atomic energy defense activities; and Defense-related FBI activities
  • Health Care– Medicaid and Children’s Health Insurance Program (CHIP); Medicare doctor payments and prescription drug payments; health research and food safety; disease control and public health services; and additional health care activities
  • Job & Family Security– Unemployment insurance, food and nutrition assistance programs, housing assistance, Earned income, Making Work Pay, and child tax credits, supplemental security income, federal military and civilian employee retirement and disability, child care, foster care, and adoption support; and other programs
  • Education & Job Training – Elementary, secondary, & vocational education programs; college financial aid; job training and employment services; employment programs for those with disabilities; and other educational and job services
  • Veterans’ Benefits– Income and housing support; health care costs and programs; education and training programs; and other benefit services
  • Natural Resources, Energy, & Environment – National Parks Service, Water and Land management; energy supply and conservation, environmental protection programs; and other energy and natural resource-related programs
  • International Affairs – Development and humanitarian assistance programs and funds, security assistance; Foreign Affairs, embassies, and various related programs
  • Science, Space, and Technology – NASA programs and research and the National Science Foundation

Ok, we have our departments, now lets use the 2013 Taxpayer Receipt to look at a real life scenario.

Tax_Receipt

 

The Williams family are filing Married Joint and claiming their two children. Let’s say their household income is $80,000 and they contribute 5 percent of their wages to a 401(k) or IRA, they do not itemize and claim the Child Tax Credit. According to their W-2, they have paid $4960 into Social Security, $1160 to Medicare, leaving $4341 as their liable income tax.  For a total of $10461 paid to  income and payroll taxes. Ready to see exactly where their taxes go?

  • $1076 – National Defense-related programs –24.79%
  • $1094 – Health Care-related programs —25.19%
  • $815 – Job and Family Security – 18.77%
  • $124 – Education and Job Training – 2.85%
  • $236 – Veterans’ Benefits – 5.44%
  • $83 – Natural Resources, Energy, and Environmental-related programs – 1.92%
  • $79 – International Affairs-related issues and programs – 1.82%
  • $49 – Science, Space, & Technology-related programs – 1.13%
  • $89 – Immigration, Law Enforcement, and Administration of Justice – 2.06%
  • $50 – Agriculture – 1.15%
  • $16 – Community, Area and Regional Development – 0.37%
  • $39 – Response to Natural Disasters – 0.90%
  • $216 – Other Government Programs (Commerce, Transportation, Administration, etc.) – 4.98%
  • 375 – Net Interest – 8.67%

In using the 2013 Taxpayer Receipt we can see the an overall picture of how our tax dollars are used in the United States. I am sure that paying taxes is not always a joyous occasion. But it is nice to know my tax money is used for our protection, communities, and education.