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Where Your Federal Tax Money Goes

This article was written by in Taxes. 16 comments.


Thanks to an organization called Third Way, American taxpayers can get a good, detailed look at how much of a typical tax bill is destined for any particular government program. Third Way is a progressive think-tank, and they studied the federal budget to provide an itemized tax receipt for the typical taxpayer.

Here is their methodology:

The total amount of federal spending is the denominator and the amount of money spent on a particular program is the numerator. The resulting quotient is the percentage of all federal spending that goes to that program. For example, the amount of money spent on Pell Grants in fiscal year 2009 was $19.38 billion, which is divided by total federal spending of $3.518 trillion. This means that 0.55% of all federal spending went to Pell Grants. Multiply this number by the amount a taxpayer paid in taxes (in this case $5,400) and that means this person contributed $29.75 to Pell Grants.

Based on their research, here is a calculator that will help you determine how much you are contributing to these programs. The calculator defaults to a total tax payment of $5,400, which was used by the study. You can enter your own total tax payment from line 60 on the 2009 version of the federal income tax return (1040) IRS tax form.

Enter your total tax bill (no dollar signs or commas):

Expense Category Amount
Social Security $1,040.70
Medicare $625.51
Medicaid $385.28
Interest on the National Debt $287.03
Combat Operations in Iraq and Afghanistan $229.17
Military Personnel $192.79
Veteran’s Benefits $74.65
Federal Highways $63.89
Health care research (NIH) $46.54
Foreign Aid $46.08
Education Funding for Low Income K-12 Students $38.17
Military Retirement Benefits $32.60
Pell Grants for Low Income College Students $29.75
NASA Space Program $28.09
Internal Revenue Service $17.69
Environmental Clean Up (EPA) $11.67
The FBI $11.21
Head Start $10.91
Public Housing $10.50
National Parks $4.27
Drug Enforcement Agency $3.14
Amtrak $2.23
Smithsonian Museum $1.12
Funding for the Arts $0.24
Salaries and benefits for members of Congress $0.19

Note that the amounts above do not add up to 100%. This is only a selection of some of the more interesting categories. The report from Third Way explains more.

Updated October 24, 2010 and originally published October 21, 2010. If you enjoyed this article, subscribe to the RSS feed or receive daily emails. Follow @ConsumerismComm on Twitter and visit our Facebook page for more updates.

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About the author

Luke Landes, also known as Flexo, is the founder of Consumerism Commentary. He has been blogging and writing for the internet since 1995 and has been building online communities since 1991. Find out more about him and follow Luke Landes on Twitter. View all articles by .

{ 16 comments… read them below or add one }

avatar TakeitEZ ♦549 (Dime)

This is a really cool tool. Thanks for sharing.

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avatar Evan

Interesting. If you put in $100 a little over 19% goes to SS and 11% goes to medicaid. So a little over 30% is for social safety net programs.

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avatar eric ♦1,549 (Half-Dollar)

I thought as much but it was interesting nonetheless.

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avatar Mustard

Hmmm. That’s a lot of money for the war and military.

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avatar Stevedh

The list is not all inclusive, if fact it adds up to about 60% of the taxes paid. Even though the war cost, military personnel, and military retirement cost are listed there’s no military hardware breakout. They show the cost for the salary and benefits for members of congress (We’re paying way too much for what we’re getting) but they don’t detail the cost of running congress, (staff, protection, transportation) or a complete breakout of the executive branch department’s cost.

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avatar mbm

It is interesting that the space program is so high on the list.

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avatar Barb Friedberg

That interactive chart is really cool. Surprisingly, I was ok with almost the entire distribution EXCEPT the current wars. Sure, I want the troops to be taken care of, but I am ready to be done with the WARS!! Thanks

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avatar jim

The THird way looked at income taxes and SS witholding. They have Social security and medicare spending so you should add both your income tax and your FICA witholdings. Also note that the spending categories they discuss are not everything and that list only covers about 60% of the total spending.

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avatar jim

I do think this is a good way to look at it and very informative.

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avatar Investor Junkie ♦199 (Cent)

Now we know what to cut with the federal budget.

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avatar KNS Financial ♦404 (Nickel)

For a $10,000 tax bill, you only pay $0.35 toward the salary and fringe of congress! I really expected a much larger number!

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avatar wylerassociate ♦907 (Dime)

this is a very good chart as well.

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avatar 4hendricks ♦248 (Cent)

Wow – thanks for the numbers, interesting

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avatar Jimbo

Where is the Pentagon on the chart? Where is the CIA? Where are the scores of military bases outside the US? Are those items included in some of the categories we see above?

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avatar Jimbo

Where is the Department of Justice? Where is the Library of Congress? Where is the Executive Dept.?

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avatar lynn ♦155 (Cent)

I was under the impression that SS and medicare is a separate fund. These are deducted under a separate catagory on a pay check. Is this another way to ‘prove’ SS needs to be put in the trash?

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