Where does your tax money go?

Thursday, April 16, 2009


















Commenter Luke...um, that is, the mysterious "
l"...has a great idea: each taxpayer should have access to an easy-to-read web application where you enter your amount of income and payroll tax and the app shows you exactly how many of your dollars went to pay for each and every government program. Why not? It would take a good programmer one day to put up. And it would make policy arguments much more concrete and well-informed.

Until we get that app, there's always pie charts.

If you pay payroll tax (Social Security and Medicare tax), it mostly goes to pay for...Social Security and Medicare. Currently, those "entitlement" systems run a surplus, so a little of your payroll tax gets mixed in with the income tax stuff. That will soon end, though.

If you pay income tax, about 13.6% of your income tax dollars go to pay for interest on the federal debt. We can't stop paying that interest (without defaulting on the national debt, which would wreck our economy semi-permanently; see Argentina, Russia, and Mexico in the 1990s).

About 35.6% of your income tax dollars go to defense and security.

About 13.6 % of your income tax dollars pay for transportation, non-defense science and R&D, and education - the "public goods" I'm always talking about.

About 10.2% of your income tax dollars pay for veterans' benefits and retirement benefits for federal employees.

About 18.6% of your income tax goes toward "safety net" programs - EITC, welfare, food stamps, support for the disabled, etc.

About 1.7% of your income tax goes to foreign aid.

And about 8.5% of your income tax goes to miscellaneous "other".

(Keep in mind, these figures are from before the bank bailouts and stimulus package.)

This isn't as good as Luke's proposed web tool. But it's pretty good. If you think you're paying too much in income taxes, you should take a look at the pie chart and see what spending you'd like to cut. Andrew Sullivan puts this a little more harshly:
Protesting government spending is meaningless unless you say what you'd cut...

I keep waiting for [conservative blogger Glenn] Reynolds to tell us what these protests are for; and he can only spin what they they are against.

All protests against spending that do not tell us how to reduce it are fatuous pieces of theater, not constructive acts of politics. And until the right is able to make a constructive and specific argument about how they intend to reduce spending and debt and borrowing, they deserve to be dismissed as performance artists in a desperate search for coherence in an age that has left them bewilderingly behind.

Well, taking a look at that pie chart, it seems like stuff conservatives might want to cut - "safety net" programs and "other" spending - adds up to a little over 27% of discretionary federal spending. Stuff that liberals might want to cut - defense - is about 35.6%. Or one might argue that banks should be allowed to fail (no bailouts) or that stimulus spending isn't necessary (no stimulus).

But Sullivan is basically right. The pie charts are there; give us some specifics, people. Taxes pay for spending; where are we spending too much?

0 comments:

Post a Comment