Every year, when I feel that that I pay too many taxes, I try to think about the fact that the money was really used to buy public goods that I need and enjoy, rather than just forcibly taken from me. Frankly, it would be nice if around tax time we could receive a government report saying: we took this much from you and here's how it was spent. Yes, the information is publicly available, but when I read that 27 billion dollars were spent on something out a 3 trillion dollar total, the numbers are so unfathomable that I just stare at them dumbfounded. Better to convert them to numbers we deal with in every day life. Therefore, I made my own report scaling the US budget to the taxes I paid, which besides the personal satisfaction, was enlightening in more than one way. I would encorage everyone to do it.
In 2007, I paid the US Federal Government a total $ 5,460.09. This includes income tax, social security, medicare etc. In principle, these different taxes fall into different coffers, but in practice the US government lumps them together, so we'll work with that. I also paid another $1,000 or so to my local friendly state government, but these are more complicated to track down. Ok, let's see some of the goodies these $ 5,000+ bought me:
DEFENSE: $1,144.52
OK, a so big chunk (21%) went to the military, much more than in other countries for sure. We may also want to add another $144.90 that went towards veterans' healtcare and pensions. Still, I will not jump on the bandwaggon of bashing military spending. If one considers it as an insurance against hostile invasions, it's still pretty darn cheap, in terms of cost vs. risk.
HEALTH: $ 1,282.47
Now, this is rather perplexing considering the lack of universal health care and the many thousands of dollars my employer and I had to dish out for my own health insurance. Basically, this is money going towards health care for the elderly (Medicare, $745.02) and the poor (Medicaid, $384.02), which I certainly won't grudge, even though I didn't benefit directly. Medical research (mostly through NIH grants) took a smallish $58.37, we can certainly do better can't we? The Food and Drug Administration cost me a paltry $3.90, which, considering their role in everyday's food safety, has got to be the best spent 4 bucks of the entire year.
SOCIAL SECURITY: $1,135.14
Another large chunk (19%) went to pay the pensions of retirees. Again not for my own benefit, but hey, they earned it, nothing to grudge here. Or rather, there would be nothing to grudge if the US government was not taking the money brought in for future social security and spending it for all sorts of other items on the budget, squandering its assets. Net result: I'm paying for someone's pension, but no one will pay for mine, which sounds more than a little unfair.
TRANSPORTATION: $149.32
This is the quintessential public good: I'm using roads, highways ($97.27) and airports ($36.53) and so I should pay for them, and again, rather cheaply, I have to admit. More money is spent by states and counties, though.
INCOME ASSISTANCE: $521.59
This would be unemployment benefits ($69.15), food stamps ($111.97), subsidized housing ($77.96), and other programs that serve to redistribute wealth between haves and have-nots. The benefits to those on the receiving end are obvious, but there are many to those on the giving end, too (reduction of crime and social conflict). Much of the money is not accounted for by the 3 programs listed, the budget was neboulous about this item (as well as many others) and I didn't pursue it in depth.
JUSTICE: $90.68
This includes law enforcement ($49.73), prisons ($11.78) and courts ($21.09); bearing in mind that this is only at the federal level, a lot of money is also spent at the state and local level. Even so, it's still a very good deal: at current rates, this money would only buy me 4 hours of a bodyguard's time, if I had to pay for my own.
INTEREST ON DEBT: $691.28
If I had paid that much interest in a year on credit card debt, I would have had an average balance of $4,608.53, at 15% interest rate, not horrible, but something worth paying back soon. Luckily, the government can borrow at much lower rates, so it would be the equivalent of $17,281.98, at about 4% interest (10 year treasuries rate). A mixed blessing really, since it's allowing a debt of 3 times the yearly revenue. In terms equivalent to the budget of an average family, it's as if we had a mortgage on a house, and the principal is not being paid back. Worse actually, since there is no house to back up its value, in this case. The important thing is that this interest takes away resources that could either be spent much better or result in lower taxes.
ENVIRONMENT: $70.45
Not a huge cost, really, for all the ranting of those who think environmental protection costs taxapayers too much. National parks take $24.85, the US EPA $16.09.
EDUCATION: $188.04
Since the federal government doesn't run any schools, this is money that goes primarily to grants to improve the quality of teaching, build schools, and to social services ($34.54) and education research. Given the circumstances, and the money spent by states and municipalities, it sounds a bit expensive, but the funding of education is complex and cannot be judged solely from the federal budget. Elementary and secondary education together take almost twice as much as higher education.
SCIENCE & TECHNOLOGY: $49.76
This includes research grants on all sciences but medicine, taken together. Compare to the $58.37 of health research and you'll know part of the reason why biomedical sciences make daily advances, and physics or chemistry do not. Especially when you consider that NASA takes up $30.86, leaving little for everything else. Not necessarily wrong, but it does show our society's priorities.
DISASTER RELIEF: $42.62
Whenever a tornado or an earthquake strikes and the president promises assistance, well, that's the cost of that assistance. Again, nothing worth begrudging, though one would wish that the new houses were not rebuilt on flood-, avalanche- or earthquake-prone land. Wishful thinking, they usually are the most scenic places.
INTERNATIONAL AFFAIRS: $70.19
This includes the cost of embassies, ambassadors and diplomacy ($22.35), humanitarian aid ($31.62), but also military aid ($18.58) . The latter is the cost of aircarfts, tanks and advisors sent to Pervez Musharraf and other much less savory characters in return for their good will and cooperation.
BENEFITS OF FEDERAL EMPLOYEES: $209.65
Federal employees are really working for us, and so it falls on us to pay for their benefits (mostly retirement). Let's not carry this too far, though: the fact that they are on my payroll doesn't mean I can fire those IRS agents knocking on my door.
GENERAL GOVERNMENT: $37.55
Ever wanted to know how much the salaries of senators and representatives cost you? Well, the cost of the legislative branch was $6.58, while the White House and related institutions cost me only $1.03. Not too bad, really. More irritating, on the other hand, is the cost of the IRS ($20.39); in essence, we have to pay to be able to pay (taxes), and, even more unpleasantly, we have to pay for those lovely tax audits.
There are a few more items, but the bulk is all here. The worst news come last. Expenses were more than revenues, a whopping $488.68 more (8.95%), sinking us even deeper into debt. This means that next year I'll pay an extra $19.55 in interests. Talk about living within our means. But wait, this calculation also includes all the funds taken from social security. Without that sort of creative finance, my share of our collective deficit would grow 3 times as big. Time to elect officials that understand basic arithmetic...
In 2007, I paid the US Federal Government a total $ 5,460.09. This includes income tax, social security, medicare etc. In principle, these different taxes fall into different coffers, but in practice the US government lumps them together, so we'll work with that. I also paid another $1,000 or so to my local friendly state government, but these are more complicated to track down. Ok, let's see some of the goodies these $ 5,000+ bought me:
DEFENSE: $1,144.52
OK, a so big chunk (21%) went to the military, much more than in other countries for sure. We may also want to add another $144.90 that went towards veterans' healtcare and pensions. Still, I will not jump on the bandwaggon of bashing military spending. If one considers it as an insurance against hostile invasions, it's still pretty darn cheap, in terms of cost vs. risk.
HEALTH: $ 1,282.47
Now, this is rather perplexing considering the lack of universal health care and the many thousands of dollars my employer and I had to dish out for my own health insurance. Basically, this is money going towards health care for the elderly (Medicare, $745.02) and the poor (Medicaid, $384.02), which I certainly won't grudge, even though I didn't benefit directly. Medical research (mostly through NIH grants) took a smallish $58.37, we can certainly do better can't we? The Food and Drug Administration cost me a paltry $3.90, which, considering their role in everyday's food safety, has got to be the best spent 4 bucks of the entire year.
SOCIAL SECURITY: $1,135.14
Another large chunk (19%) went to pay the pensions of retirees. Again not for my own benefit, but hey, they earned it, nothing to grudge here. Or rather, there would be nothing to grudge if the US government was not taking the money brought in for future social security and spending it for all sorts of other items on the budget, squandering its assets. Net result: I'm paying for someone's pension, but no one will pay for mine, which sounds more than a little unfair.
TRANSPORTATION: $149.32
This is the quintessential public good: I'm using roads, highways ($97.27) and airports ($36.53) and so I should pay for them, and again, rather cheaply, I have to admit. More money is spent by states and counties, though.
INCOME ASSISTANCE: $521.59
This would be unemployment benefits ($69.15), food stamps ($111.97), subsidized housing ($77.96), and other programs that serve to redistribute wealth between haves and have-nots. The benefits to those on the receiving end are obvious, but there are many to those on the giving end, too (reduction of crime and social conflict). Much of the money is not accounted for by the 3 programs listed, the budget was neboulous about this item (as well as many others) and I didn't pursue it in depth.
JUSTICE: $90.68
This includes law enforcement ($49.73), prisons ($11.78) and courts ($21.09); bearing in mind that this is only at the federal level, a lot of money is also spent at the state and local level. Even so, it's still a very good deal: at current rates, this money would only buy me 4 hours of a bodyguard's time, if I had to pay for my own.
INTEREST ON DEBT: $691.28
If I had paid that much interest in a year on credit card debt, I would have had an average balance of $4,608.53, at 15% interest rate, not horrible, but something worth paying back soon. Luckily, the government can borrow at much lower rates, so it would be the equivalent of $17,281.98, at about 4% interest (10 year treasuries rate). A mixed blessing really, since it's allowing a debt of 3 times the yearly revenue. In terms equivalent to the budget of an average family, it's as if we had a mortgage on a house, and the principal is not being paid back. Worse actually, since there is no house to back up its value, in this case. The important thing is that this interest takes away resources that could either be spent much better or result in lower taxes.
ENVIRONMENT: $70.45
Not a huge cost, really, for all the ranting of those who think environmental protection costs taxapayers too much. National parks take $24.85, the US EPA $16.09.
EDUCATION: $188.04
Since the federal government doesn't run any schools, this is money that goes primarily to grants to improve the quality of teaching, build schools, and to social services ($34.54) and education research. Given the circumstances, and the money spent by states and municipalities, it sounds a bit expensive, but the funding of education is complex and cannot be judged solely from the federal budget. Elementary and secondary education together take almost twice as much as higher education.
SCIENCE & TECHNOLOGY: $49.76
This includes research grants on all sciences but medicine, taken together. Compare to the $58.37 of health research and you'll know part of the reason why biomedical sciences make daily advances, and physics or chemistry do not. Especially when you consider that NASA takes up $30.86, leaving little for everything else. Not necessarily wrong, but it does show our society's priorities.
DISASTER RELIEF: $42.62
Whenever a tornado or an earthquake strikes and the president promises assistance, well, that's the cost of that assistance. Again, nothing worth begrudging, though one would wish that the new houses were not rebuilt on flood-, avalanche- or earthquake-prone land. Wishful thinking, they usually are the most scenic places.
INTERNATIONAL AFFAIRS: $70.19
This includes the cost of embassies, ambassadors and diplomacy ($22.35), humanitarian aid ($31.62), but also military aid ($18.58) . The latter is the cost of aircarfts, tanks and advisors sent to Pervez Musharraf and other much less savory characters in return for their good will and cooperation.
BENEFITS OF FEDERAL EMPLOYEES: $209.65
Federal employees are really working for us, and so it falls on us to pay for their benefits (mostly retirement). Let's not carry this too far, though: the fact that they are on my payroll doesn't mean I can fire those IRS agents knocking on my door.
GENERAL GOVERNMENT: $37.55
Ever wanted to know how much the salaries of senators and representatives cost you? Well, the cost of the legislative branch was $6.58, while the White House and related institutions cost me only $1.03. Not too bad, really. More irritating, on the other hand, is the cost of the IRS ($20.39); in essence, we have to pay to be able to pay (taxes), and, even more unpleasantly, we have to pay for those lovely tax audits.
There are a few more items, but the bulk is all here. The worst news come last. Expenses were more than revenues, a whopping $488.68 more (8.95%), sinking us even deeper into debt. This means that next year I'll pay an extra $19.55 in interests. Talk about living within our means. But wait, this calculation also includes all the funds taken from social security. Without that sort of creative finance, my share of our collective deficit would grow 3 times as big. Time to elect officials that understand basic arithmetic...
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