Where Your Taxes are Going

April 16, 2009 by  
Filed under Taxes

The pleasure of finalizing the disgorgement of our tax dollars to the federal beast has come and gone. I think now it would be fun yet painful to look at some federal income tax data courtesy of the Congressional Budget Office.

Where Your Tax Dollars Being Spent

Here is the CBO breakdown on allocation of federal tax dollars to different segments of the federal budget:

4-14-08tax-f11

The interest on debt is now 8% of the budget. That will be steadily climbing, as will Social Security as baby boomers retire. Both factors will lead to more taxes.

The “safety net programs” label is an interesting way to spin the concept of income re-distribution, for which the IRS has now become a primary tool.

Who is Paying the Taxes

The CBO this month also released its most recent projections on the distribution of federal taxes and household income which I also found interesting. (I’m not sure why it uses 2006 data.)

taxliabilities

To me the most revealing component of these projections is in the highest quintile of family income. I say this because only those folks are burdened with a share of federal tax liabilities that exceeds their share of household income. For each of the lower income groups, their share of the income pool is greater than their share of the federal tax burden.

Say what you want about the wealthy, but this data tells me that they are paying more than their fair share of federal taxes. The problem is that there is so much money envy in our society that many of those with lower incomes just assume that it is unfair that others make more or have more. So their knee-jerk reaction is to say “tax them” until they don’t have more.

Now I have to return to money making activities. The government is waiting.


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Comments

5 Responses to “Where Your Taxes are Going”
  1. Doctor S says:

    Great visual you provided us with Mr TML. Do they have archived breakdowns of past years as well?

  2. Melissa says:

    I usually notice a healthy sprinking of obnoxious dissenters (usually of a left-minded slant) commenting on your articles almost immediately.
    Ummm… why the silence, Libs…?
    I know… actual facts are MEAN.
    YOU GO, MR TOUGH MONEY LOVE!!!

  3. Rick Beagle says:

    The reason that the liberals haven’t responded is because this is an incomplete picture, and I repeat, when you government puts into practice laws and a tax code that broadens the separation between the wealthiest of Americans and the poorest, you get an unfair distribution of wealth. Personally, I want a flat tax system but with zero loopholes. Mainly because I am lazy, and figuring out a % is fairly straightforward for me.

    Just for argument, what was the tax rate on your wealth under Reagan, Bush 1, Clinton, Bush 2, and now Obama? There is a great article on this at Politico, let me see if I can find it….

    Which brings me to another point, why in the heck haven’t you been complaining about the spending and debt creation over the last three decades?! Look at our military spending versus our school expenditures? Anyone think that’s a good balance for our future? What about those billion dollar no bid contracts in Iraq and Afghanistan? There was a pallet of money (billion) that just disappeared, where was your anger at that?!

    In conclusion, as a country we got looted by the Bush Administration for Trillions of dollars, and you are mad because the poorest in our nation don’t pay enough taxes? You know those “let them eat cake” comments are always so helpful, especially when they include pretty bars and graphs….

    Peace.
    Rick Beagle

  4. SJ says:

    Uhh… doesn’t some group have to pay more than the income they make -___-.

    Now all you need is a diagram showing the cost to the government, in terms of services used/taken/etc to judge fairness.

    That’s a lot harder now isn’t it =)

  5. SJ says:

    Actually, it’s a slightly less lobsided…

    http://www.ctj.org/pdf/taxday2009.pdf

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