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Tax Dollars

Where Does Your Tax Money Go?

In the coming week, millions of Americans will be paying income taxes to the U.S. government, but those payments ($894 billion) will cover barely a third of the government’s spending. Most of the rest of the federal budget will be covered by payroll taxes and related receipts ($774 billion) and corporate income taxes ($226 billion). At least $427 billion will have to be borrowed.

This year, the federal government will spend more than $2.5 trillion—an amount almost impossible to grasp. If you do the math, this number translates into $6.8 billion a day, or $4.72 million a minute and $8454 for each man, woman and child in the country. So what do we get for our money?

Nearly three-quarters of the federal budget goes to four areas: the military, health-care benefits, interest on the national debt and Social Security. The rest goes to various social-aid programs, including education grants, scientific research, the arts, support for small businesses, foreign aid and running the government.

The military

Including estimates for the wars in Iraq and Afghanistan, we will spend $527 billion on military expenses this year. In fact, the U.S. spends as much money on its military as all other nations combined. About $5 billion goes for military assistance to foreign governments, including $2.2 billion for Israel and $1.3 billion for Egypt.

Intelligence spending—also part of the military budget—is classified, but GlobalSecurity.org, an intelligence policy think tank, estimates that the year’s expenses for spying and other intelligence-gathering will be more than $40 billion. About $34 billion goes to the Department of Defense, including $7 billion for the National Security Agency and $7 billion for the National Reconnaissance Office, which builds and maintains spy satellites. An additional $5 billion goes to the CIA. (Among other intelligence-gathering agencies, the FBI receives $5.2 billion, and the Department of Homeland Security accounts for about $33 billion.)

U.S. military spending also includes $2.5 million to remove unexploded bombs dropped over Laos during the Vietnam War, $400 million to train and equip the Afghan National Army and more than $600 million on Army recruitment advertising.

Medicare and Medicaid

Medicare benefits for 40 million elderly and disabled patients and Medicaid assistance for 46 million low-income, disabled and elderly patients will total $521 billion.

Our Senators and Congresswomen do not pay into Social Security and, of course, they do not collect from it. You see, Social Security benefits were not suitable for persons of their rare elevation in society. They felt they should have a special plan for themselves. So, many years ago they voted in their own benefit plan. In more recent years, no congress person has felt the need to change it. After all, it is a great plan. For all practical purposes their plan works like this: When they retire, they continue to draw the same pay until they die. Except it may increase from time to time for cost of living adjustments. For example, former Senator Byrd and Congressman White and their wives may expect to draw $7,800,000.00 (that's Seven Million, Eight-Hundred Thousand Dollars), with their wives drawing $275,000.00 during the last years of their lives. This is calculated on an average life span for each of those two Dignitaries. Younger Dignitaries who retire at an early age, will receive much more during the rest of their lives. Their cost for this excellent plan is $0.00 ... NADA ... ZILCH ... This little perk they voted for themselves is free to them. You and I pick up the tab for this plan. The funds for this fine retirement plan come directly from the General Funds; Our Tax Dollars At Work! From our own Social Security Plan, which you and I pay (or have paid) into — every payday until we retire (which amount is matched by our employer) — we can expect to get an average of $1,000 per month after retirement. Or, in other words, we would have to collect our average of $1,000 monthly benefits for 68 years and one (1) month to equal Senator Bill Bradley's benefits! Social Security could be very good if only one small change were made. Jerk the Golden Fleece Retirement Plan from under the Senators and Congressmen. Put them into the Social Security plan with the rest of us ... then sit back and watch how fast they would fix it. Social Security Number Few people know it, but the first three digits of a Social Security number are a code for the state in which the card was issued. This code, which can be used to confirm a place of birth or an employment history, is not public knowledge. However, many private detectives have the key to the code and will crack the Social Security number for a fee. Milo Speriglio

Social Security

This popular but controversial program, created in 1935 to help provide a financial safety net for all Americans 65 and over, is paid from payroll taxes on those still working. This year’s payment, to 47 million recipients, will total $519 billion.

National debt

If you spend more than you earn, you have to make up the difference by borrowing. The U.S. currently has a total debt of $7.7 trillion—more than $25,000 per person. Just like individuals, the government has to make regular payments on the debt, which include interest. Interest payments this year will total at least $321 billion, or an average of $90 a month, or $1085 for every American.

The debt has increased dramatically in the last three years. Revenues have gone down 5.6% while spending has gone up 23%, building an enormous debt for future generations to deal with.

Other social-aid programs

Beyond the huge outlay for Medicare and Medicaid, there are other social programs that total about $200 billion. Unemployment trust fund benefits add up to $40 billion; the Food Stamp Program, $34 billion; Supplemental Security Income (SSI) for 6.9 million aged, blind and disabled Americans, $42 billion; medical services for veterans, $27 billion; and the Housing Certificate Fund for low-income households, $20 billion.

Three major education programs provide grants to: local school districts to help educationally deprived students ($12.7 billion); Pell grants to help needy students attend college ($12.4 billion); and grants to school districts to aid students with disabilities ($10.6 billion).

And did you know... Within larger departments are a vast array of diverse and interesting programs. These include a reward of $25 million or more for the arrest of Osama bin Laden; $48 million for the IceCube Neutrino Observatory (under the ice at the South Pole); $5 million for bed space for illegal aliens awaiting deportation; $1 million for the Cook County, Ill., Cold Case Homicide Unit, which has reopened 100 cases, with 25 convictions; $1.45 million for rhinoceros and tiger conservation; $496,000 to transfer the Presidential materials of Richard Nixon from Washington, D.C., to the Richard Nixon Library in Yorba Linda, Calif.; and $500,000 for the Audubon at Home program to help homeowners make their backyards more wildlife-friendly.

Oh, yes, one more way the government uses our tax dollars—the annual operating expense of the Internal Revenue Service (IRS): $10.3 billion. We can learn a lot about our government’s priorities by comparing the funding for certain programs. For example:

Science vs. the arts.

To the National Science Foundation: $5.47 billion. To the National Endowment for the Arts: $121 million.

Business vs. safety.

Funds for the Securities and Exchange Commission ($888 million) and the Small Business Administration ($580 million) exceed the Occupational Safety and Health Administration ($464 million) and the Consumer Product Safety Commission ($63 million) by $941 million.

Abstinence vs. adoption.

This year, we will spend $168 million for sexual-abstinence education but only $13 million for adoption awareness.

Fighting drugs vs. alcohol.

Various anti-drug programs spread over different government departments total about $12 billion, while the National Institute on Alcohol Abuse and Alcoholism will receive only $442 million.

Nuclear energy vs. other sources.

The Office of Nuclear Energy, Science and Technology has a budget of $503 million. By comparison, $85 million goes to the Solar Energy Technology Program and $41.6 million for Wind Energy Technology. (Fallout note: It will cost $7.3 billion this year to continue the cleanup of radioactive waste from nuclear-weapons production and $6.6 billion a year to maintain our nuclear warheads.)

Space exploration for war or peace?

Expenditures for space include $10 billion for research and development of an anti-missile defense system and $6.7 billion for space flight, including the space shuttle and space station. For more purely scientific efforts: to the Astronomical Search for Origins, including development of space telescopes, $1.1 billion; for Mars exploration, $681 million; for robotic exploration of the Moon, $52 million.

Iraqi War The higher your tax bracket, the cooler crap you buy for our boys.
Salary	Pentagon Payoff
$15,000	$28.80, or one set of cold-weather long underwear
$34,500	$132.48, or 365 assault rifle bullets
$51,500	$263.68, or one .45-caliber pistol
$75,600	$483.84, or one ceramic body-armor plate
$182,700	$1,520.06, or one lightweight GPS receiver

Rebuilding Iraq vs. rebuilding America

Since the invasion of Iraq, the U.S. government has allocated $19 billion for reconstruction and related projects in Iraq, although much of it has yet to be spent. This figure is more than the combined annual budgets for the National Cancer Institute, Amtrak, the Low-Income Home Energy Assistance Program, Federal Air Marshals, operation of the National Park Service, Homeless Assistance Grants, the Superfund Hazardous Substance Cleanup, Home-Delivered Meals to the Elderly and youth employment and training programs.

Historical Reminder: The government spent more than $40 million for the Whitewater and Monica Lewinsky investigations but only $15 million for the 9/11 Commission to examine the terrorist attacks of Sept. 11, 2001.

What The President Costs

This year, we will spend $1.2 billion for the U.S. Secret Service to protect the President, the Vice President, their families and visiting dignitaries, plus more than $255 million to maintain the Executive Office of the President. The President gets an annual salary of $400,000, plus allowances for extra traveling ($100,000), personal expenses ($50,000) and "unanticipated expenses” ($1 million).

David Wallechinsky. Where Does Your Tax Money Go? PARADE Magazine. Published: April 10, 2005.

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Perverse Subsidies: How Tax Dollars Can Undercut the Environment and the Economy A reference on world subsidies and their effects on the environments and economies they are meant to serve, discussing the prevalence and damaging consequences of perverse subsidies, a term used to describe subsidies that do the opposite of what they were intended to do.

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