Every year at around this time, millions of Americans wave goodbye to a big chunk of their earnings from the previous year when they send off their tax checks. It’s never fun to give away hard-earned money, especially when is seems like you get nothing in return.
But in reality, every American’s income taxes don’t just disappear. If you’ve ever wondered exactly where each dollar you pay in taxes goes, here’s a breakdown.
Military: 27 cents
The single largest chunk of U.S. income taxes last year went to defense. Some Americans see this is a worthwhile price to sleep easy and safe at night, while others believe this money is simply eaten up by the well-established U.S. military-industrial complex. Love it or hate it, military spending accounts for 54.4 percent of the U.S. government’s annual $1.1 trillion in discretionary spending.
Healthcare: 26.5 cents
Nearly 54% of all U.S. income taxes last year went toward either defense or healthcare programs. Americans pay a high price for programs like Medicaid and the Children’s Health Insurance Program. Healthcare costs have continued to balloon out of control in recent years, driving drug pricing to the forefront of the 2016 presidential campaign.
Interest on Federal Debt: 15.3 cents
OK, this one stings a little bit. Last year, the U.S. spent $223 billion on interest on its national debt of more than $13.5 trillion. Every year, the government spends more money than it takes in, and every year the debt rises, driving interest responsibilities even higher. The worst part is that Americans get no benefits in return for this portion of their taxes.
Social Security, Unemployment & Labor: 8.4 cents
Even though a huge amount of tax dollars are already going toward Social Security, the aging Baby Boomer Generation has begun to place a tremendous strain on the Social Security budget. In fact, some estimate that the Social Security surplus will be completely depleted by 2035, and the Social Security payroll tax will only be able to fund about 75% of the promised benefits.
Veterans Benefits: 5.8 cents
If everyone agrees that national debt interest is a horrible waste of taxpayer money, most people would agree that veterans benefits are a very worthy cause.
Food & Agriculture: 5 cents
The U.S. Department of Agriculture provides a wide range of services from natural disaster relief for farmers to education and conservation programs.
Government: 3.4 cents
Of course, all those politicians that make terrible decisions about how to spend your tax dollars have…
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