Your Itemized Tax Receipt

how the Gov spends your moneyNow that your tax money is in the hands of Uncle Sam, what will he do with it? How will the government allocate your contribution to the overall budget?

Your Social Security payments are easy; they go to pay Social Security benefits to current retirees, and for now, they fully fund that obligation. (The future is another matter.) Some of that money also goes to cover a portion of Medicare’s expenses; the remainder is covered by general federal revenue.

Your income taxes are divided among several broad budgetary categories. A surprisingly large chunk is spent on the military (27%) and military-related veteran’s benefits (5.1%). Another 22.7% goes to various forms of healthcare for U.S. residents, including the rest of the Medicare bill plus Medicaid. 13.9% of your tax money goes to pay interest on Uncle Sam’s debt–paid out to Treasury bill and bond holders every six months. Unemployment benefits take up another 9.8%.

In the “Everything Else” category on the government spending pie chart, a surprisingly low 4.5% is spent on running the government, including various agencies such as the FBI and immigration services. A total of 4% goes to housing programs, community development and block grants, while education gets a 2% slice of the pie–for programs like Head Start, and also the Pell Grants for college students. Less than 2% is spent on scientific research, international affairs, transportation and energy.

If you’d like to get a receipt from the government for your taxes paid, which itemizes how that money is spent, well, good luck petitioning the IRS. But you can get a fairly accurate receipt from the National Priorities Project here: http://nationalpriorities.org/interactive-data/taxday/ . Just type in this year’s tax payment from your 1040, find your state, push a button and you’ll see what you paid for in terms of government services, interest and overhead. Depending on how you feel about our government spending priorities, it may make your tax experience more or less painful.

Sources:

http://money.cnn.com/2014/04/11/pf/taxes/how-federal-income-taxes-are-spent/index.html

http://nationalpriorities.org/interactive-data/taxday/

About Objectively Speaking

Tom Batterman, founder of Vigil Trust & Financial Advocacy and Financial Fiduciaries, LLC is in the business of representing the best financial interests of his clients. Having provided objective, fee-only financial management services for over two decades, he specializes in managing the investment and related financial affairs of individuals and mutual insurance companies who do not have the time, interest or expertise to manage such matters on their own. As an objective, unbiased professional who takes on a fiduciary responsibility to his clients, he guides clients to the financial decisions they would make themselves if they had years of training and experience and the time and expertise to fully research and understand all of their options. Founded in 2010 as an outgrowth of Vigil Trust & Financial Advocacy, Financial Fiduciaries, LLC is a financial management solution for individuals and mutual insurance companies who recognize they do not have the time, interest or expertise to properly attend to their financial matters on their own. While there are many financial “advisors”, most of them have investment products to sell and the “advice” they provide is geared toward getting their clients to engage in a purchase. As one of the rare subset of advisors known as “fiduciary advisors”, Financial Fiduciaries does not sell any investment product so its guidance is not compromised by conflicts of interest which plague ordinary advisors. Prior to his employment in the financial industry in financial advocacy and trust positions, he worked at a private law practice in the Wausau area in the areas of estate planning, tax, retirement planning, corporate organizations and real estate. He is a graduate of the University of Wisconsin-Madison and the UW-Madison Law School and has during his career held Series 7, 24 and 65 securities licenses. A longtime resident of the Wausau, Wisconsin Area, Tom is active in the community. He enjoys golf, curling, skiing, fishing, traveling and spending time with his family.
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