Peeking at Uncle Sam's Receipts
Taxes are a funny thing. For many of us, they’re the single biggest line item in our budget. And yet, most of us couldn’t tell you what they’re paying for. Correction: what we’re paying for. It’s just money we supposedly earn but don’t get to keep (or ever see.) It’s not just kids who could better understand the life of taxes; it’s parents, too.
As tax day approaches, wouldn’t you like to know what exactly Uncle Sam is spending your money on? It turns out Uncle Sam is pretty good at tracking his receipts. Today, we’re taking a look at his purchases and your contribution to each.
2017 was a big year for Uncle Sam. He spent $4 trillion, to be exact. Most of that budget comes from families just like yours (the other portion was borrowed--for now). According to the Motley Fool, the average American household contributes $10,489 to that each year. $8,367 of that is federal taxes, $2,046 represents state and local taxes, and $75 in miscellaneous taxes.
So where does that money go, exactly? Applying percentages published by the CBPP to the average family’s federal tax bill reveals some truly interesting numbers. Here’s what the average American household contributes to specific national projects, starting with the top three:
$2175.42 to Medicare, Medicaid, CHIP, and marketplace subsidies
$2008.08 for Social Security
$1225.05 on defense
Surprised so far? When many of us think of taxes, we think “roads, bridges, and schools.” While those are certainly funded by taxes, they aren’t the biggest spending categories by any means. Let’s skip down the list a bit…
$251.01 for education
$167.34 for science & medical research
$167.34 for transportation and infrastructure
If your kids are in public schools, that $251.01 is quite the deal. On the other hand, if you don’t qualify for Medicaid or CHIP, the $2175.42 you spend on the services might feel pricey. Feel like you’re throwing money out the window? Consider what your day would look like without taxes. We did, in an entire episode of Biz Kid$ called A World Without Taxes. Check it out and share it with your kids. Teaching a class? We created a free lesson plan just for you.