"What Does The Government Do With All That Money?"
Today is tax day, when about $1 trillion is due from American taxpayers to fund their national government. Income taxes make up the largest slice of the revenue pie, though payroll taxes, whose burden fall heaviest on working families, are close behind. The combination of President Bush’s tax cuts for the rich and President Obama’s tax cuts for the rest of us means that Americans paid a lower share of their national income in taxes in 2009 than at any time since 1950. Yet the sheer size of our country and our economy means that the federal government still collects an awful lot of money in tax revenues. Total federal revenues exceeded $2.1 trillion in 2009, and 2010 collections will be up slightly with the economy recovering. So it seems very reasonable to ask, “What does the government do with all that money?”
To help us understand, the Center for American Progress has prepared this remarkable interactive chart of the federal budget, from the 20.3% that goes to Social Security down to the 0.01% that goes to the Mine Safety and Health Administration:
Getting a better sense for where our dollars go can help take some of the sting out of tax day. Did you know, for example, that more than 60 percent of all federal spending goes to just four areas: Social Security, Medicare, Medicaid, and defense? These are all programs that enjoy broad public support. The next largest category of federal spending is unemployment compensation (5.5 percent). And fewer than 20 percent of people want to cut back there. Another sizable chunk of our tax dollars go to pay for veterans’ benefits (3.5 percent), which is the absolute least popular thing to cut according to a recent Economist/YouGov poll.
Take a look for yourself at CAP’s new interactive tool to explore the federal budget and see exactly where the tax dollars actually go. It might make mailing in that tax return just a little bit easier.