Skip to main content

Where Federal Tax Money Comes From and Goes To

Image
By
The Committee for a Responsible Federal Budget recently published their annual study. There are some simple and telling charts that help people better understand the source of the US's tax revenue and where that revenue is spent. 
 
On spending, for every $100 you pay in taxes: 
  • $23.61 goes to Social Security payments and administration
  • $15.26 goes to Medicare, the government health insurance program
  • $9.55 to Medicaid, the health insurance program for the poor
  • $19.82 goes to armed forces, including veterans benefits
  • $6.25 interest on national debt
In total, 50% went to Social Security and health programs. Include armed forces and interest payments, and we’re up to about 75%.  
 
The 2016 federal budget fell $15.24 (out of every $100) short of revenues brought in, having improved from $35.70 in 2011. If a balanced budget were deemed the appropriate thing to do, where would you cut?
 
  
  
On the source of tax revenue, you can see individual income taxes are the largest source but payroll taxes are likely more than most Americans would think.  
 
 
 
To Your Prosperity, 
Kevin Kroskey, CFP®, MBA
  
Source:

Popular posts from this blog

Diversification: Disciplinarian of Disciplinarians

By
Disciplined diversification works when you do and even when you don't want it to. Diversification in effect forces you to sell the thing that has been doing so well in your portfolio and to buy the thing that hasn't. While this makes rational sense, it is emotionally difficult to execute. Think back to the tail end of 2008--were you selling bonds and cash to buy stocks? Most likely you weren't unless your advisor or some sort of automatic trigger did it for you. Carl Richards of www.behaviorgap.com provided a good reminder of how diversification works in a recent NY Times blog post. The diversification he discusses here is more so related to equity asset-class diversification but also touches on the three basic building blocks--equities, bonds, and cash. He doesn't discuss alternative asset classes -- an asset class that doesn't fit neatly into the three basic categories -- being used to further diversification, but that's a detailed topic for another day. ...
Read more

What Does $100 Buy You in Your Home State?

By
A new map released by the Tax Foundation shows exactly how far $100 would go in all 50 states. Using recently released data from the Bureau of Economic Analysis, the Tax Foundation was able to show how the varying prices of goods, housing and income taxes in each state can impact consumers’ purchasing power. Southerners and Midwesterners have a serious edge over those along the East and West Coasts. A hundred bucks goes the furthest in Mississippi, where $100 will buy you what would cost $115.74 in another state that's closer to the national average. The next low-price states are Arkansas, Missouri, and Alabama. Ohio comes in at an encouraging $112.11 Meanwhile, $100 would only be worth $84.60 in the District of Columbia, the priciest state, $85.32 in Hawaii and $86.66 in New York. http://finance.yahoo.com/news/how-much--100-is-worth-in-your-state-152310027.html Click the Map Read More
Read more

2013 Key Tax Proposals

By
On February 13, President Obama's Fiscal Year 2013 budget was released. Follow this link to get a full copy of the   2013 Budget . The   Treasury's Green Book   containing general explanations of the Administration's revenue proposals can be found here. Robert Keebler, a leading professional in the area of tax and estate planning, highlighted some of the key proposals potentially affecting taxpayers below: Extend Bush tax cuts for all but the top two brackets. The only change would be to have the 33% and 35% rates go back to their pre-2001 levels of 36% and 39.6%. Taxpayers in the top two marginal brackets would still benefit from reduced rates on the portion of their income taxed in the lower brackets. Raise the long-term capital gains rate to 20% for single taxpayers making more than $200,000 per year, $250,000 for married taxpayers filing jointly and $125,000 for married taxpayers filing separately. Tax rate on qualified dividends would revert to ordinary income t...
Read more