Saturday, August 20, 2016

How Much Of Your Tax-Paid Federal Tax Dollar Goes To Each Federal Program?

One thing that is pretty scary is how very little the average, or any American taxpayer and voter really knows about where their tax dollar goes in the first place.

We are having a Presidential contest right now where the most 'important' things seem to be what one candidate says or what the other candidate has done wrong with emails and contributions.

Both are 'important'. However, they pale in comparison when you think about what they and the next Congress are going to do with YOUR tax dollar each and every day for the next 4-to-8 years while in the White House.

That is what we are doing, aren't we? Electing someone to lead this entire nation of 322 million people and lead the process to make decisions over how we fund everything in the country which not only has domestic ramifications but international as well.

And if you ask your spouse, partner, friend, family or colleague nearby right now, dollars-to-doughnuts they have no idea of where their taxpayer dollar is being spent right now, aside from the fact that they don't have that dollar in their pocket to spend on their families and what they want to do with it.

We grabbed the chart above from President Barack Obama's White House website where this simple calculation was posted up until 2014 but for some reason, has not been updated for 2015 and 2016 figures yet.

Go ahead and put in the amount of money you paid to Washington last year in total from your income, capital gains, payroll and any other federal tax you may have paid and see what the chart spits back out to you.

If you are an average American, you paid about $9000 in combined federal tax last year which is the figure we used for the example above.

Once you calculate your percentages and raw tax amount paid, stare at it a little while and ask yourself:

'Is that what I really want my federal tax dollar being spent on? And in that magnitude and amount?'

For example, $816.30 of that $9000 paid went to pay interest on the national debt. The national debt is the accumulated debt rung up by President Bush and Obama and Congresses over the past 16 years when neither have decided to be the fiscally prudent leaders we need and help facilitate making the decisions on the large public policy decisions that we elected them to do.

It has been the most damning indictment of our current leaders simply because the number has gone from about $5.8 trillion in overall gross national debt in 2001 when President Bill Clinton left office to $20 trillion today. 

Neither President Bush nor President Obama nor any of the Congresses since 2000 get any accolades for doing anything right when it comes to balancing federal revenues with federal expenditures. They are all culpable and blameworthy regardless of political party or good or bad intentions.

$20 trillion in national debt accumulation in relative peacetime compared to out-and-out war such as we experienced in World War II is $20 trillion in national debt accumulation no matter how you slice it.

And just wait until interest rates rise back to a more 'normal' level on T-bills and longer term US bonds. The next generation of taxpayers might see $2000 of their yearly $9000 tax payment go solely to pay off the interest on even more debt unless the next President and Congress puts a halt to this fiscal spiral of insanity and/or figures out how to stimulate or at least allow the economy to grow robustly again, unlike under President Obama who still has not figured out the fallacy of his economic philosophy and policies.

Take a look at Health Care. It is now the largest combined expenditure out of Washington when you add Medicare and Medicaid together. It exceeds our national defense spending by 3.5 percentage points.

An average taxpayer paid $2474 to pay for the health care of millions of other Americans last year when many of those same average American taxpayers were being hammered with rapidly escalating premiums, deductibles and co-payments on their own health insurance plans.

That same taxpayer paid $2152 for our collective national defense.

Go to the White House website and see what you paid in actual dollars for each program above. If you are a very high income taxpayer, your amounts are understandably going to be much higher than the average of $9000 noted above.

The rest of us should thank you and shake your hand every time we see you then. Mainly because you are paying for the vast preponderance of ALL of these programs above, not the rest of us. 50% of American taxpayers don't pay any income tax at all and only pay payroll taxes that ostensibly pay for SS and Medicare (but they really don't cover the entire cost of either, contrary to public perception)

The top 1% of all American taxpayers now pay approximately 1/2 of all income tax in America according to a CNBC report

Good Grief! Talk about a top-heavy tax system. Why would we ever want to dissuade wealthy people from making more money? They need to keep making it so they can pay the taxes everyone wants paid to fund the programs they like!

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