Friday, October 1, 2010

Where do our taxes go?

The left leaning Third Way think tank published an itemized breakdown of where a typical federal taxpayer's revenues go. The median US income was $34,140 in 2009, which required $5,400 in income tax (include FICA payroll tax). Of that amount, here is the tax breakdown according to their calc's:


Item Tax % of total
Soc Sec $1,041.00 19.278
Medicare $626.00 11.593
Medicaid $385.00 7.130
Debt interest $287.00 5.315
Iraq/Afghanistan $229.00 4.241
Military Personnel $193.00 3.574
Vet Benefits $75.00 1.389
Fed Highways $64.00 1.185
NIH $47.00 0.870
Foreign Aid $46.00 0.852
K-12 Low Income Student Aid $38.00 0.704
Retired Military $33.00 0.611
Pell Grants $30.00 0.556
NASA $28.00 0.519
IRS $18.00 0.333
EPA $12.00 0.222
FBI $11.00 0.204
Head Start $11.00 0.204
Pub Housing $11.00 0.204
Nat Parks $4.00 0.074
DEA $3.00 0.056
Amtrak $2.00 0.037
Smithsonian $1.00 0.019
Arts Funding $0.20 0.004
Compensation for Congress $0.20 0.004

Of course this list is not comprehensive, as the sum of all items adds up to $3,200 or 59% of total, so I guess the rest of our taxes went to thousands of other smaller programs and maybe the salaries of other federal workers. I just find it disturbing that interest on our deficit, NASA, and Amtrak consume so much of our taxes versus other needs. I know the military is expensive, and we spend more than most of the G20 combined. And for those critics who say we dispense too much foreign aid, I think 0.9% is nothing for the richest nation in history. Compare that to the 31% we spend to support the 39M or so elderly Americans today. 13% of our population is consuming 31% of our revenues, and many of those retired are plenty well off financially.

Speaking of being well off, maybe you have heard of this U of Chicago law professor (Todd Henderson) who blogged about how hard his life is even though his household makes over $250k/year (his wife is an oncologist). He's worried about Obama raising taxes on him, and claims that he's not "rich". Obviously his narrow mindedness has offended the blogosphere and media, when the median US household income is $45k and 10% of willing workers can't land a job. Plus Henderson's complaints don't hold water: he lives in a pricey neighborhood, works easy hours, sends his kids to fancy private schools, contributes heavily to his 401(k), and has a landscaper and nanny. I'm sure he spends on frivolous consumer goods and services too. So if he feels so "pinched for cash", how about eliminate some of those clearly non-essential expenses and live like a regular guy? Or just become a corporate lawyer to triple your pay but never see your family. He made spending choices to make life easier and more comfortable, but there's no free lunch. He is not entitled to all those luxuries. If you want more money, you have to spend less or work harder. But don't complain about getting reasonably taxed for being part of the richest 3% of households in America. Today, the rich still get to keep 75% of their income after taxes. That's hardly a shake-down.

http://finance.yahoo.com/career-work/article/110876/why-the-rich-dont-feel-rich

“There’s class warfare, all right, but it’s my class, the rich class, that’s making war, and we’re winning.” - Warren Buffet

"In order to engage in warfare, one side has to fight back. There is no class warfare in the U.S. It ended a long time ago through surrender." - Noam Chomsky

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