As tax day arrives, where will your dollars go?
April 15 is a tough day for many taxpayers, who are likely to ponder some big questions as they write out checks to Uncle Sam.
Among those thoughts may be where those hard-earned tax dollars are actually spent. For many consumers, wrangling with the tax code is bad enough. But on top of that, your payments may seem as if they're getting sucked into a black hole, while politicians rail about out-of-control foreign aid spending and medical research funding.
But the truth is out there, thanks to think-tanks such as the Center on Budget and Policy Priorities. The biggest federal expenses are Social Security, defense, and major health programs like Medicare and Medicaid. Together, those three programs eat up about two-thirds of federal spending.
"People are often surprised by how much of the federal budget comes down to Social Security, Medicare and defense," Loren Adler, research director at the Committee for a Responsible Federal Budget, told The Wall Street Journal. "When I ask what they want to cut, usually the first item is foreign aid -- but it's very small."
Some of the programs taxpayers love to hate consume mere slivers of the budget, according to the nonpartisan Committee for a Responsible Budget. Out of every $100 dollars in paid taxes, only 97 cents go toward foreign aid. Food stamps, a bugbear of some conservatives, only takes up $2.39 of every $100. Education, meanwhile, is even less, at just $1.32.
Some of the programs that receive the smallest share of federal spending are on the chopping block under the proposed budget from Rep. Paul Ryan, R.-Wisconsin. The conservative plan, approved by the House last week, would cut cultural programs such as the National Endowment for the Arts, which receives about 0.012 percent of federal spending. To be sure, Ryan is also proposing cuts to big-spending social programs such as Medicaid, although the plan would boost defense spending.
But before decrying the government's out-of-control funding on, say, medical research (2 percent of spending), taxpayers should first consider whether the programs actually provide a public good, the Center on Budget and Policy Priorities advises.
"While critics often decry 'government spending,' it is important to look beyond the rhetoric and determine whether the actual public services that government provides are valuable. To the extent that such services are worth paying for, the only way to do so is ultimately with tax revenue," the group says.
Taxes are inevitable, of course. It doesn't mean you're going to enjoy preparing your tax filings -- more than half of Americans either hate or dislike doing their taxes -- but on the other hand, those dollars are also helping to build and maintain national infrastructure (3 percent of spending.)
And after your taxes are filed and the checks written or refunds deposited, there's yet another day to celebrate: April 21, also known as Tax Freedom Day.
Just six days after the 2013 tax deadline, the nation will have earned enough money so far this year to pay its total 2014 federal tax bill, according to the non-partisan think tank the Tax Foundation.