The Surprising Truth Behind Tax Day: Where Your Taxes Go

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This post first appeared at the Campaign for America’s Future blog, OurFuture.org.

If you groan about tax day, you’re certainly not alone.

But what if tax day was something we could be proud of as members of a democracy? Would you feel differently about paying taxes if you knew they were going to support public services that you, your family and your community rely on — such as public safety, roads and bridges, schools, health care, social services and national parks?

Millions of Americans file their federal income tax returns on April 15 each year with no idea what the government actually does with all that money.

This is surprising, considering that individuals are our nation’s primary bill payers. Income taxes paid by individuals account for 46 percent of all federal tax revenues, which are projected to be $3.34 trillion in 2015. Other tax revenue comes from payroll taxes paid jointly by workers and employers, accounting for 32 percent and corporate income taxes paid by businesses, which make up 13.5 percent.

Given how much taxpayers collectively contribute to our nation’s revenue stream, it goes without saying that we should be able to influence how the government spends that money. Unfortunately, that’s not always the case. The federal government doesn’t make it easy to find out where your tax money goes.

That’s why the National Priorities Project (NPP) has done the work for you.

where your 2013 taxes went, image

Using a customized tax receipt calculator, you can find out exactly how the federal government spent each penny of your 2013 taxes. Look up your tax receipt right now — is your money going where you think it should?

Across the United States, the average taxpayer paid $11,715 in 2013 federal income taxes. The military received the largest share of that sum, $3,174, followed by health care, which received $2,662 for programs like Medicaid and the Children’s Health Insurance Program. Meanwhile, only $238 went to education programs, and just $15.84 and $6.56 went to the Low-Income Home Energy Assistance Program and National Forest System, respectively.

Average federal income taxes paid, 2013

NPP has also looked at each state’s average taxpayer and calculated where taxes from every state are going. These state-by-state tax receipts show the state with the highest average taxes paid (Connecticut, $18,988) and lowest (Mississippi, $7,402) and everything in between.

Although these state receipts show the average taxpayer’s contribution to the budget, Americans don’t all pay taxes equally. In theory the tax code is progressive, meaning those who make more money pay higher tax rates — yet in practice that’s not always the case. As Warren Buffett made famous, billionaires sometimes pay lower rates than middle-class workers. And some corporations, like Bank of America and Citigroup, have gotten away with paying zero federal income taxes, even when they make billions in profit. That’s because the tax code is chock-full of tax breaks.

Ten of the largest tax breaks that together totaled more than $750 billion in tax savings in 2013 overwhelmingly benefited the top 1 percent of households, with 17 percent of the benefits going to those top earners. That’s in part because tax deductions — one important type of tax break — are far more likely to benefit the wealthy than middle- and low-income folks, because deductions only offer savings to taxpayers who itemize deductions. Only 16 percent of households making between $25,000 and $30,000 itemize tax deductions, while nearly 100 percent of those making over $200,000 itemize.

Historical data, individual and corporate tax revenues as of 2013

Tax day is an opportunity to draw attention to some of the central budget policy choices facing our nation. How should our tax dollars be spent? Who should pay more or less in taxes? Is Congress listening to what Americans think are top spending priorities?

As primary investors in our nation, we should all speak up with our own opinions on these questions. Making our priorities clear to lawmakers in Congress is a key part of making tax day something we can be proud of, even as we groan about filling out all those IRS forms.

Robin Claremont
Robin Claremont is a director of development and communications at The National Priorities Project. Previously, Robin was development & communications manager at The Food Bank of Western Massachusetts, where she led foundation relations, grantwriting, media relations and publications.

 

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  • oldngrumpy1

    Please take note that in all talk about reducing the deficit attention is always directed to the smallest segments of the budget. This misdirection is quite deliberate and is only meant to obscure the massive waste in the big spending items. Medicare and Medicaid are currently operating at 2% overhead above actual costs and the government pays half of all health care billing in the US, so it is imperative that we bring down actual costs in the system. Obamacare addresses this, but will not be enough. We will eventually move to a single payer system out of absolute necessity.

    The big opportunity for cutting effectively lies in our outrageous military/industrial complex. We will have to find a way to turn that spending into areas that are productive to our economy, such as infrastructure, or it will bury us. Most of that massive number is the result of our policy of acting as bodyguards for the fossil fuel industry around the world. Moving to renewable energy will have benefits far beyond the simple balance of supply and demand driven by direct costs.

  • Anonymous

    If the Health-Care system didn’t have to deal with fraudulent insurance manipulations (accident cases for example), and if people didn’t fast-food and smoke and sit on their butts, we could cut way down on expenses. Plus, the public is largely ignorant about Veganism. / Jean Clelland-Morin

  • Anonymous

    Perhaps you could explain the last chart. Given the trends of both corporate and individual taxes, can you explain where the “other 40.5%” of the 2015 incomes are going to come from? Is that where the Social Security and Medicare taxes are? Something else? It seems pretty insufficient to portray such a chart where you’re leaving out about 40% of the total revenue makeup.

  • Anonymous

    This article is so full of misleading data and statements, not to mention glaring distortions.

    First of all, talking about “average” income tax payment per person is incredibly misleading. It implies that the typical individual pays that amount, which couldn’t be further from the truth.

    The truth is that the MEDIAN (i.e. the typical individual) pays approximately ZERO in federal income taxes. That is right. The typical (median) American does not pay ANY federal income tax. The top 10% of income earners pay virtually all income taxes – 94% to be exact.

    So please Ms. Claremont, tell me exactly why the other 80% of Americans that pay virtually no income taxes, including the majority which pays ZERO should be proud of?

    Other distortions include the fact that in “corporate income taxes” the author leaves out the additional 16% of federal tax receipts that corporations pay in payroll taxes, the 3% they pay in excise taxes (e.g. fuel taxes, tabaco, etc).

    So does the author expects to be accorded any credibility when she fails to mention critical points above?

    The fact that the typical (median) American pays ZERO income tax is not noteworthy?

  • Terry Poupart

    Sorry oldngrumpy but military spending is the ONLY thing our Federal Government should be spending money on and it’s the ONLY spending that has been cut.

  • Anonymous

    Those poor people that pay NOTHING in income tax, do they pay FICA tax? How about sales tax? Property tax for a car? You’re awful quick to point out corporations hidden outlays and ignore the same for actual people … Poor people, the elderly, disabled. Let me guess? Call yourself a Christian, too? PUKE.

  • Anonymous

    Typical conservative. You act like income taxes are the only taxes.

  • Anonymous

    Do you have evidence that the things you mention account for a large fraction of “expenses?”

  • Anonymous

    Yes, with the VA, it’s not enough to be a Veteran. You actually had to be in a war zone to get VA medical care when you are destitute. Yes, you are no longer in the military when they hand you off to the VA. Never mind that you get the same “military healthcare.”

  • hack

    Where are you getting your figures from? I’m asking because as a relatively poor(>$30k/yr) working man I pay over 7%(over $2k) after deductions, and I’m not even middle class. Not buying the top 10% argument. I’m not against paying taxes, they’re a small price for roads, police, fire, etc. but people who have more money and use more resources should pay their share too.

  • Anonymous

    In case you didn’t get it – the article is about April 15 – Personal Income Tax Day. And it is the author that chose to highlight income taxes.

    “Millions of Americans file their federal income tax returns on April 15 each year with no idea what the government actually does with all that money.”

    This article would be a sure F at my kids high school. I was simply pointing out some of the obvious faults. There are many more.

  • Anonymous

    As I said above – it is the author how chose to focus on Income Tax – writing an article on Personal Income Tax Day – April 15 – and filling it with misleading and incomplete info.

    If she was writing an article about Payroll Tax Day – I’d address that.

    But if you want to know the numbers, I’ll provide it for you. In 2013, 28.9% of American households paid payroll taxes, without paying income taxes – so about a quarter of the households. And many of them get their money back in the form of the EITC.

    As to address your other bitter points, the thrust of this article, and many in the liberal media, is to convince voters that higher income taxes are needed.

    It is disingenuous to say – Americans should feel good about paying higher income taxes to do all these wonderful things.

    No. It is broken when half the population pays no income tax and the 20% of people pay 94% of those taxes. It is a broken system when there is a push to raise taxes that are not payed by the majority of people.

    For example, I don’t feel good that 14% of my federal taxes (and growing) are used top pay interest on the national debt to large financial institutions and foreign sovereign wealth funds who own our bonds.

    The author just leaves that out.

  • Anonymous

    Hack – $30K/year puts you on the second quintile of income. The average income in that quintile is $27,000. People on that quintile pay on average 11.6% of their income in federal income, state income, payroll, local and sales taxes.

    So I think you are right on where your peers are.

    The data is published my multiple sources – IRS, Census, etc. All you have to do is Google. Which apparently is too much work for the author.

  • Anonymous

    And I’m sure you’ve never filed the home interest mortgage deduction? Or have a family member that educated themself via a Pell grant? The middle class reaps the benefits of “handouts”, as well. What’s broken is that there is 21 T trillion sitting off shore and untaxable and your ilk well defend said robbery because the villains are “job creators”. I often wonder where Republicans were when the Justice League was on the tellie. Eating dirt?

  • Catherine Lin

    Hooray! The day when we transfer massive amounts of wealth from the productive to the unproductive. Truly a day of celebration.

    Here are the taxes I paid today – federal income taxes ($18,000), New York state taxes ($3,500), also a “penalty” by not paying more than 90% of my taxes prior to tax day (BS tax)…. OH YEAH, did I forget to mention the taxes I pay throughout the year? Sales tax…. health insurance ($350/month from Freelancers Union)… car insurance ($25/month from Insurance Panda)…. (I view them as taxes because the govt forces them on us)… there even was a $100 fee to renew my drivers license! (I call this the “getting older” tax). I’m sure I’m missing some!

    I’m looking out the window now from my building on 28th Street in Manhattan at the projects (public housing). I pay $3000/month to live here. They live here for free. I would expect at least a THANK YOU from them… you know, cause I pay for them to live in the same area as me. But, the women will probably just bump into me on the streets and yell at me to watch where I’m going. The men will probably scream sexist/racist things at me as a walk by. Ahhh, America!

  • Jerry Squarey

    And you work in the Defense Contracting Industry? Just because some company comes out with something new and expensive, doesn’t mean it is necessary. There is plenty of wasteful spending in the military that could be cut out without sacrificing security. Many members of congress hold stocks and interests in the military/industrial complex, THAT is why the military budget is so bloated. John McCain is a prime example, if it were up to him we would be knee deep in the Syrian war. We would have troops and weapons stationed everywhere in the world there is civil disobedience or a protest about overreaching corrupt Governments. We haven’t “Won a War” since WWII, I think we should learn something from that.

  • Anonymous

    So – basically you are trying to talk about items – other than personal income tax – that are not the thrust of the article.

    Why? You can’t come up with a moral justification for 20% of people paying 94% of income taxes and 50% paying nothing?

    [And by the way it is 94% AFTER accounting for all the deductions you mentioned. That is NET 94%. But I'm sure you fully believe that all that money belongs to the government, and if they tax it less - by a deduction - they are actually giving me the money, right?]

    So you talk about offshore $$$, without even understanding what you are talking about? The off shore money by the way is not “untaxable”. It is very much taxable, by the only major country (the US) who taxes income derived outside its borders. The tax liability is simply deferred until the money is brought to the US.

  • Cicero31

    The country is like a small ship that carries so many huge guns it cannot make way and will probably capsize. This is just crazy–that is–unless you are in the know about those imminent invasions by Cuba and Canada.

  • ….

    You never saw RED DAWN?

  • ….

    How exactly is a fee to renew a license a “tax” I guess you expect the government should just issue it for free? Not pay the employees who processed it, not pay for the materials it was made from?

    It is your own fault if you failed to deduct enough from your pay throughout the year and had to pay a tax.

    Also… I am glad they force you to get car insurance (etc) so I don’t end up paying when you run your car into mine.

  • Kesh Meshi

    My problem with tax day isn’t so much about how much I pay, but how complicated my taxes are, and I don’t even take any deductions aside from my personal deduction.

  • Kesh Meshi

    $18k? You’re rich. And you’re “only” paying $3k to live in Manhattan?

    I wish I had your problems.

  • Kesh Meshi

    So you refuse to take into account non-income taxes as the amount poor people pay into the system, but you trot out payroll taxes in the discussion of how much corporations pay? Intellectual dishonesty, anyone?

  • W. John Young

    That was a movie like Star Wars not real.

  • W. John Young

    Give her a break she has to buy shoes, lots of shoes. Expensive shoes.

  • Shelhl

    Thank you. I was about to say the same thing.

  • W. John Young

    Really so the middle and lower income folks pay no payroll tax? Payroll taxes make up 40% of federal tax income. The 1% pay little, very little, of that. All taxes that corporations pay are part of doing business and are passed on to customers, fuel tax etc are deductions. You might have mentioned that the 1% own 90% of US wealth. The military expenditures are there to protect who? The folks living in trailer parks? Come on get a life.

  • W. John Young

    Which is when? How about never?

  • Shelhl

    Almost half of US households don’t pay federal income tax because they don’t OWE federal taxes, primarily due to the fact that they are low-income families. Many are elderly, disabled, or students, who will presumably become taxpayers in the future. You mention that one of the “distortions” of this article is that “the author leaves out the additional 16% of federal tax receipts that
    corporations pay in payroll taxes, the 3% they pay in excise taxes (e.g.
    fuel taxes, tabaco, etc).” Yet, when others bring up very similar non-income related sources, you dismiss them as being irrelevant to the article. You can’t have it both ways. Intellectual dishonesty, indeed.

  • http://conformingdissent.blogspot.com Dissenter

    As someone who just realized they’ve paid just under 50% of their 2013 income to Federal, State & payroll taxes, and written two enormous checks- I’m pissed! …not just at how complicated and costly tax compliance is but also at this graph which shows that very little of my taxes go to helping the needy and to investment in the future. Almost nothing goes to education and infrastructure (forward looking) while over half goes to Defense, SS & Medicare (backwards). That’s absurd! As is my 166 pages of tax returns.

    I’d love a radically simplified tax system that takes 0% up to the median individual income, 10% between the median and $1M and 20% over $1M. Corporate taxes & capital gains also set to 20%. No deductions, credits, subsidies, giveaways- period. Simple. 1 page. People smarter than I may suggest different thresholds or percentages to make the math work from a revenue perspective but hopefully one gets the point.

    We need focus our attention on where we are spending the money because we are being robbed blind by a system that can’t control the amount of spending. It’s tough to swallow how we all stand for it while writing these massive checks that just get pissed away by our worthless elected representatives. All of them. This is non-partisan criticism.

  • Anonymous

    I’m sorry but that’s nonsense. LOL. It’s about as absurd as the rights whining about how horrible tort litigation is that is driving up health care costs – silly. The true cost of health care in the U.S. is easily identified – it manifest from HMOs and shareholders who profit from denial of services and rising prices. Plain and simple. It is the reason health care costs are roughly 3xs as much and yet we have worse outcomes in almost all categories – barring some cancer treatments. Agreed, people need to exercise more. But, one must also consider, as an example, Statin drugs – drugs that are constantly being shoved down peoples throats but are incredibly harmful for the vast majority of people who have/had been taking them. i.e. Big Pharma. contributes to our health care costs that have nothing to do with ones diet or exercise. In fact, they sell drugs that are NOT helpful…ironic eh?

  • Anonymous

    Our defense spending is unsustainable and completely out of control and yet both parties fail to do anything about it. There’s simply no way for a nation to spend that much on defense, health care, and Veterans benefits. None. And, cutting so called ‘entitlements’ will do nothing to impact how we are, quite literally, taking money away from our internal defense (education, infrastructure, roads, bridges, etc.) to fun defense contractors and big business such as General Electric.

    Yet, one cannot even suggest cutting defense spending without being labelled a radical or some extremist who does not love his/her country; even though it’s completely rational to cut defense spending – drastically. How ‘grunts’ making 18,000 a year cannot figure it out is beyond me. They get paid crap so that contractors can bilk them and the American people of more than 1,000,000,000.00 a day…much more. I’ve got close friends in the military – life long friends – who have amazing retirements, health care, travel discounts, etceteras etceteras…privileges that civilians could only dream of. Yet, we’re not allowed to call this into question – not at all. I respect and honor those who serve but I give no quarter to those who serve and benefit from ALL the government can offer them and yet they ridicule and condemn others who require government assistance or support. Or they advocate a ‘smaller government’ up until it means defense cuts….hypocrites innumerable.

    Either we address where our tax dollars are going or we’ll face some frightening outcomes in the not to distant future. A future that seems almost certain given that our political bodies are bought and sold. When was the last time elected officials acted in a fashion that truly impacted, negatively, the profits of corporate america to help the ‘avg’ person? A.) never.

  • Anonymous

    Who says I refuse to take them into account? I simply point out what the author, who would get an F for this article at our local high school, left out.

    She certainly did not leave out the employee part of the payroll tax.

    And by the way the employee paid portion of federal payroll taxes is 16% of federal revenues – just about enough to pay interest on the debt to financial institutions, and sovereign wealth funds.

  • Anonymous

    “A large portion of the wealthiest people in America make their income on capital gains (either through insider trading or hedge fund management firms that invest rich people’s money for them). How much of that goes to taxes?”

    Lets help you calculate…..

    A CA based Corporation makes $1 in profit. 35% of that is paid in corporate income tax. 12% goes to CA income tax.

    Corporation is left with $0.53 of that $1 profit. Lets say it pays it entirely in dividend to its owners/shareholders.

    Of that $0.53, 20% is paid in Federal income tax on dividends, 3.8% in Obamacare taxes on dividends, another 12% is paid in CA income. So $0.34 is left.

    So the answer to your question is that dividends in CA, NY, NJ, CT etc ate taxed at about a 66% rate. Meaning that the government takes 2/3 of every dollar, leaving 1/3 for the tax payer to spend.

    But wait, we are not done. When the taxpayer spends that $0.34, he or she will typically pay 8% or so in sales tax. So really only 31c of each dollar in profit escapes the government confiscation.

    Anything else I can answer for you?

  • Warren Sivertson

    It doesn’t bother me to pay taxes. It is an acceptable normal part of a functioning society. What bothers me is the amount I pay in proportion to others who either make much much more or those who free load. There seems to be little oversight on those who make millions, those who live on federal and state money and those who receive the benefits of federal tax l just like military, health care, education, and housing. The most bewildering number is 13.9 cents on the dollar to INTEREST on debt! !!!! WOW!!!!!! That is a staggering and sobering number. We could solve our poverty problem with the interest we pay on our debt???????

  • David

    Does it bother anyone that our government spends .27 cents out of every dollar for the military, while spending .2 cents out of every dollar for education?

  • Anonymous

    Interest? What about the principal repayment? Where is this accounted for in the dollar graphic?

  • Joe Schmo

    It’s real in Ukraine…

  • Anonymous

    Not surprising that Catherine Lin is getting bashed by the freeloaders that she supports. Ingrates.
    One day this “system” will collapse.

  • Anonymous

    Catherine never said anything about blacks. Not so Sharp are you?

  • Anonymous

    Sounds like W. John is envious and would like a pair of those lady shoes.

  • Anonymous

    US spending on education is very high by even Western world standards (remember the fed budget mainly goes to DoEd bureaucrats and some technology grants and what not). We don’t need more money spent on primary/secondary education, although we could certainly use more control over the cost of university education!

  • Anonymous

    Ain’t any without a budget surplus.

  • Anonymous

    Then stop voting for said parties … (if you do) …

  • Anonymous

    Given SS/Medicare benefits are always being cut, it seems obligations based on the long-existing FICA tax are not actually being met, so I would not look at that spending as parasitical quite like the bloated DoD budget.

    In any case, it is trade and finance policies that screwed taxation/revenue policy. If you enforce a 20% corporate tax rate with no deductions, that would mark a huge increase on many powerful corporations who might be able to relocate their HQs abroad with relatively little penalty. I think this has to be fixed first. Then, hopefully we can re-create the relative balance between income and corporate taxes like we had 50 years ago.

  • Anonymous

    It does not cost $100 to create a license unless perhaps you have built in RFID technology into its construction. It is a tax because it is a control on your freedom of movement. It does not go to pay for the roads, just to a bureaucracy to tell you you are eligible to use what you’ve already paid for.

  • Anonymous

    She’s talking about the projects in Manhattan. It is a decent guess.

    People who seem to be of recent foreign extraction should be careful when they make such complaints because the government’s liberal immigration policies of a few decades now have indirectly contributed to a lack of job opportunities for many native citizens (Black or not). Then such complaints smack of, “I think I am talented and work hard and have the right to be in America and make my money…who are these parasites (native citizens) who freeload”…

  • Anonymous

    The top 10% of American society holds 73% of the gross wealth. If you subtract debts, that is surely closer to 90%.

    So, I’m confused, did you think everyone should pay the same exact AMOUNT OF MONEY in taxes? $5,000 per head? And if you can’t pay, we have a nice slave labour camp for ya?!

  • Anonymous

    I think hack is confused since you claimed most people don’t pay tax, implying they are freeloading, and now you are telling him the second quintile pays 12% in tax. Imagine actually if he pays 7% to the IRS, he also has FICA withholding and any local private property taxes and sales tax – it must count up to almost 20%.

    Romney paid 15% to the IRS, probably total minutia in sales tax, property tax probably barely dents his income – probably about the same %.

    Is that normal?

  • Anonymous

    Surely, allibearbear brought up mortgage deductions because you brought up EITC.

  • Anonymous

    Almost no corporation pays 35% tax. The most powerful ones pay approximately zero, sometimes they get paid by the Treasury due to net deductions.

  • Anonymous

    Oh really? A bunch of skinhead-types occupy Maidan in support of oligarchic politicians trying to enact an IMF-austerity plan backed by the European Union and United States. The latter put sanctions on the government to tell them not to remove the protestors. The police are mostly unarmed and told not to shoot people shooting at them. Eventually, they quit and leave the city centre and the mobs take over the streets. They go and beat up politicians, many of them leave, then the mob controls parliament and votes itself into government. A coup d’état.

    Then the regions that voted 80-90% for Yanukovych are unhappy having had their votes annulled and the West supports the coup régime sending in the army there to crush opposition. Opposition to their geopolitical games and political programme of massively increasing the cost of living is “terrorism”, but all the armed neo-Nazis in Maidan were “peaceful protestors”.

    So who is the Red Dawn there? The Russkies or the Westerners?

  • Anonymous

    Yes but those Marines, Sailors, and airmen have such nice looking uniforms–let’s not talk about the army, poor dears.

  • Anonymous

    Uni education is high because of lavish loans and grants from the federal government. Too much fat at the universities–take it from a retired faculty member of 34 years. See for yourself–visit on google earth any large or small university of your choice. The physical plants are unbelievable. All sorts of sports palaces, swimming pools, this and that, for the poor darlings. Only problem is, the poor darlings who graduate will really BE poor thereafter.
    Now take google earth to a northern European country.. You’ll see beautiful cities–much more beautiful than ours–but very smallish, ratty-tatty universities (with the exception of Oxbridge, but even there the physical plants are relatively small). This is called common sense. We in America must be common sensical about our higher education also.
    THE END

  • John Fedak

    Education spending is mostly done at the state and local level- so looking at the percentage of federal dollars isn’t really a valid comparison

  • Anonymous

    My wife’s sister’s family makes about a third of what we do. Because of child credits, etc., they pay very little in taxes a year. We pay 15x what they pay in taxes. Our family of three doesn’t consume any more resources than their family of five… yet we pay 12x more taxes?

    My wife and I effectively subsidize my in-laws. How is that fair?

  • Anonymous

    Yes. I’m not doing the research for you. Either call me a liar and give your sources or don’t waste my time. Jean Clelland-Morin

  • Anonymous

    Nope. I’m simply pointing out that “feeling proud” about the income tax and be willing to raise it is disingenuous when half the population doesn’t pay any and 20% of people pay 94% of it.

    If you would like my opinion, taxing wealth creation and income is distortive and immoral. The alternative, taxing consumption – i.e. you get taxed when you exchange your money for things you want – is much more palatable.

    ALL – and I mean ALL – advanced countries (Europe for example) have much higher percentage of their taxes in the form of consumption taxes – e.g. VAT. Therefore, they have a much simpler tax code, and 1/20th of the tax lawyers that we have here.

  • Anonymous

    I don’t expect anything. I’m simply pointing out that the US Income Tax, unless for example, the European countries VAT, is a narrow tax, paid by few Americans, therefore “Americans” can not feel “proud” about it, since 20% pay 94% of it.

    By contrast, in Europe, the main tax, the VAT, is paid by 100% of citizens, and most visitors.

  • Anonymous

    You are incorrect. If a corporation has profits (needed in order to pay dividends) those profits will be taxed at 35% for all substantial companies.

    If you are thinking about overseas profits not disbursed as dividends – that can lower effective tax rate for a time – but if the money is brought back to pay dividends it will be taxed at the corporate rate.

    Again – a little education of how things actually work, vs the sound good babble is in order.

  • hack

    I can’t really judge how that’s fair without a lot more in-depth knowledge of you and your wife’s sister’s finances and obligations, can I? The only thing I can say is that our system is supposed to tax the excess income after basic necessities are paid for, hence deductions, dependents, etc. If you make triple what she does and don’t have kids, tax shelters, etc. then your taxes will increase obviously. Less income(especially near poverty level income) doesn’t leave much excess money to be taxed.

  • JonThomas

    I don’t disagree with all your points but your first statement is predicated on a misconception.

    Although it’s true that the Constitution only directly details a few, it does not actually LIMIT many areas for Government involvement.

    In fact, the constitution only limits Government in certain areas. Beyond those limitations, any laws that help fulfill it’s stated goals, including those of the Declaration of Independence, are completely legitimate concerns.

    As proof, very soon after it’s inception, most of the same people involved in it’s wording, signing, and ratification went on to amend it’s contents. The Constitution itself even makes allowances and directions for further amendments!

    The Constitution is not, nor was ever intended to be, a document whose goals are solely to limit government. The Constitution is simply an establishing framework… nothing less.

  • hack

    That’s exactly right. After saying most don’t pay income tax, when obviously even working poor like me (at least without kids/deductions) pay them and most definitely people with more(middle-class income) pay also I don’t see how median is $0. I’m not arguing many pay nothing, obviously poor people with dependents and those who basically cheat the system(Exxon, GE, etc.) pay nothing. And since almost half(or more than that now) are living at or below the poverty line…well, you can’t get blood from a turnip

  • Anonymous

    That 13.9 cents goes right to the 1%. There should be no interest on the debt because the United States Government should be in charge of and own the Federal Reserve.

  • JonThomas

    Very good points! Here’s a few references to back up your statements…

    http://online.wsj.com/news/articles/SB10001424052970204662204577199492233215330?mg=reno64-wsj&url=http%3A%2F%2Fonline.wsj.com%2Farticle%2FSB10001424052970204662204577199492233215330.html#articleTabs%3Dvideo

    http://money.cnn.com/2013/07/01/news/economy/corporate-tax-rate/

    And one from just 2 days ago showing, when last measured, an effective corporate tax rate of only 12.6%…

    http://dealbook.nytimes.com/2014/04/14/looking-at-some-corporate-tax-loopholes-ordinary-citizens-may-envy/?_php=true&_type=blogs&_r=0

    The person with whom you are debating is so wrong it isn’t funny. Regardless of how many times he is proven wrong he continues on spreading falsehoods and propaganda… sad really.

  • rg9rts

    Get a keg its cheaper

  • Anonymous

    Our system is supposed to let every American pay their fair share. Taxing people all out of proportion to their income isn’t fair… it’s the result of utilizing envy to pit the majority of Americans against the minority. Fair would be taxing income proportionally, after an exemption had been made for earning up to the poverty level, e.g., $25K.

    After years of hard work, and many setbacks, I make more than most folks but am not wealthy. Yet federal payroll taxes alone take almost 25% of my income. When you combine that with SS and FICA it’s close to 30%. When you add on state and local taxes and fees, it’s closer to 35%. Make it 40% plus once you add in state and local sales tax. I get to work from the beginning of the year until mid-May until I actually get to keep any of the money I make.

    Again, how is that fair? Fair would be proportional, and that would mean everyone would have some skin in the game… and perhaps care how the money is being spent.

  • Anonymous

    Here’s something else to consider: money only has value when you spend it. Romney built a new house in La Jolla where he lives now with his wife. That house cost a few million… and that money turned into wages for plumbers, carpenters, furniture makers, sales people, electricians, etc. And, it was taxed at every handover. I’m sure Romney’s total tax burden (income, cap gains, property, sales tax) is much higher than $1.5MM a year. So, why does everyone give the man a hard time?

  • Anonymous

    Please educate yourself on where your local property taxes are spent. They spend over $10,000.00 per student annually in my local district with horrific results. The notion that education is underfunded is outrageous.

  • Anonymous

    We will never solve the “poverty problem” as long as government involved. Once people start to understand that the government exists because of problems and that it industrializes and entrenches these problems as a means of control we will begin to make progress. Consider the complicated nature of the tax code. It will never change because it employs an entire industry of CPA middle men and an army of IRS agents to decipher and enforce it.

  • Dude

    What you are saying does not make any sense to me.

  • Anonymous

    The Federal Reserve is a PRIVATE interest. It is not a government body. They, the 1%, print the new bills for pennies on the dollar and charge American’s the full amount plus interest.

  • Anonymous

    If you read through much of the Federalist Papers, the theme of the Founders was that the central government was to be limited, that the best government was the one ‘closest’ to its citizens instead of one far away in the nation’s capital. The guiding philosophy was that the government was only authorized to do what was specified. The 10th Amendment makes this clear: The powers not delegated to the United States by the Constitution, nor prohibited by it to the states, are reserved to the states respectively, or to the people.

    In short, the federal government is only supposed to do those things specifically authorized under the Constitution; everything else is someone else’s authority or right.

  • JonThomas

    Yes, and therein lies the rub.

    For example, the Constitution grants the Federal Government power to ‘regulate commerce’. It doesn’t say that it has to do so while remaining small. Instead the details are extremely brief, Such brevity allows for a flexibility of power fitting the occasion. Today, a large federal governmental infrastructure is required to fulfill that task in order to protect the General Welfare. Notice that a stated goal, found within the Preamble, does not say the Welfare of the businesses, or their relatively few number of owners… but rather the General Welfare!

    Another example…

    The U.S. Constitution did not ban slavery. Instead, the sanity required to remove such an evil institution finally arose approximately 60 years hence the 10th Amendment’s ratification. At least one Federal Agency was then needed to administer change.

    In fact, the States were forced to surrender power so that Constitutional goals, some set forth in the Declaration of Independence, could be fulfilled. Two of these goals… the rights to Liberty and the pursuit of Happiness, along with at least another from the Preamble… to “secure the Blessings of Liberty”… guided those who recognized that the original document fell short, and that to maintain unity, the balance of power between the States and the Federal Government, needed adjustment.

    Examples such as these are what help foster the understanding that to maintain a healthy nation, especially over time, the U.S. Constitution is simply a framework for a Union. It is adjustable, amendable, and flexible. The size of government is as necessary as the times call.

  • David

    Yes, you’re right. But it is still true that the federal budget is 10x more for the military than education.

  • Dude

    There is no one pct conspiracy. I don’t know why you think this so called one pct would be getting the interest. That does not make sense.

  • Barry Cunningham

    Of course, what this does not show is the rest of the iceberg, where the tax breaks went.

  • Anonymous

    It would be more accurate to characterize all the payroll tax as from the worker. If there wasn’t a worker, there would be no tax. Just because a part of this tax happens not to show up in the worker’s pay slip paperwork doesn’t change the reality that the -whole- tax represents a payment by the worker from a sum of money the employer is willing to pay them for their work.

  • Roy Tremain

    The U.S. Constitution specifies that corporations must pay taxes and that workers pay no individual federal income tax for their work

  • Anonymous

    “Social Security is a huge factor… but it is a Ponzi scheme that will run out of money in the next decade or two. ”

    Not true. If absolutely nothing is done to reform the system between now and then, Social Security will only be able to pay about 75 percent of its benefits beginning around 2034. But that does not mean that Social Security is…or will ever become…”insolvent.”

    Given the millions of people who lost most of their life saving during the Great Recession, do you really want your retirement security determined by Wall Street?

  • Anonymous

    What isn’t portrayed is the public money being filtered through corporate coffers or corporate welfare… while they continue to reduce their tax obligations.

  • DT

    Yes, only in America do you have the right to complain about being rich enough to have to pay so much in taxes, and complain about the cost of choosing to live in one of the most expensive places on the planet, while simultaneously blaming and belittling the poor people who live around you and expecting them to thank you at the same time. The fact that you complain about paying for the privilege of owning and driving a car indicates your misconception of taxes infringing on your rights. The government does not in any way force you to have a car or drive, that is a privilege you can choose to pay for if you wish. If you would like to reduce your taxes or eliminate them altogether, there is a simple solution: simply make and spend less money. There, problem solved.

  • KenB

    Interesting misrepresentation about the military. Their budget is ONLY 18% and the 27% presented is not correct (it is a combination of other programs that re NOT DoD). When misrepresenting by such a large amount this site cannot be trusted, it is PURE politics.

  • Anonymous

    ja jah thats what you conservatives been saying for 40 years cut taxes and cut entitlements

    has it worked-good grief get something new

    You capitalists blame everyone else
    you blame government
    you blame unions
    you blame poor people

    you have no one else to blame

  • Anonymous

    dont derp it for conservatives

  • Anonymous

    Before the government was involved the poverty problem was worse. SS is here because of so many poor widows. Medicare because so many seniors could not afford healthcare. You would have seen soup lines in this last recession were it not for unemployment insurance. This notion that these contribute to worse is not based in reality. It’s based in your desired ideology.

  • Seanathair Mike

    It doesn’t say DoD. It says military if you can read. Unless you can itemize the other 9% as NON military, you stand incorrect!

  • Anonymous

    Poverty levels have been frozen at near 15% for generations. Do not lecture anyone with regards to poverty being “worse” without government because you are in effect arguing for a failed and wasteful status quo. It has nothing to do with ideology or your implied statist inentions and everything to do with miserable results.

  • Anonymous

    You need to do lots of reading. It is clear you have no sense at all for how any of this works and are mingling BS rhetoric with foggy half-truths. Yes, the Federal Reserve is a cancer and a statist/Keynesian machination. No, it does not serve the mythical 1% but a very small group of corporate fascists that have convinced drones like you that there is some sort of seperation between the corporate and banking titans and the federal government.

  • the7thson

    The whole graphic with the dollar bill is flawed. Nowhere in there is Social Security mentioned – nor is welfare spending.

  • the7thson

    You say that ” The U.S. Constitution specifies that corporations must pay taxes and that workers pay no individual federal income tax for their work”. Where, in the Constitution does it say that “corporations must pay taxes”? As for individual federal income tax…have you never heard of the 16th Amendment?

  • the7thson

    Are you serious? The Constitution most certainly DOES limit the federal government. Have you never heard of the 10th Amendment?

  • the7thson

    Ever since the creation of the U.S. Department of Education, the U.S. education system has gone from the world leader to a laughingstock. Maybe the federal government shouldn’t be spending ANYTHING on education. Leave that on the state and local level. It worked just fine for almost 200 years.

  • JonThomas

    Perhaps you could read our entire conversation. The 10th Amendment is more about delineating, not ‘limiting’ power.

    Whatever power is needed to fulfill the goals set out for the Government, within the delineated powers for the Federal Government, is not outside acceptable application.

    As I explained (again, please read the rest of the conversation) there are reasons for expanded size of today’s Federal Government.

    Also, if you read my comment closer you might have caught the qualifiers (such as… ‘solely’, and… ‘many’) that I used in an attempt (as feeble as that turned out) to prevent these further replies. Oh well, so much for that idea.

    This is a poor forum to discuss deep subjects. That is why saying that “The Constitution most certainly DOES limit the federal government…” or… “federal government is only supposed to be responsible for protecting the country and ensuring trade, most of the spending beyond the military and governmental overhead should be cut…” are not honest nor beneficial statements without at least 3 paragraphs of specificity.

    Delineating powers does not limit size. Are there areas that could use downsizing? I’m sure! But there is where the arguments, and the influence peddling begin.

    Is the military bloated? From the charts above, that case could easily be made.

    However, certain political representatives wish to reduce the size of government to get rid of agencies charged with regulating business and protecting the environment.

    The power given to government to ‘regulate commerce’ (for one) allows for such an agency. The actual ‘size’ of the government must expand when the task is monumental.

    The government in place in the year 1800 could not even begin to fulfill the power of regulating commerce.

    And as I also explained, even the delineation of powers between the Federal and State Governments are open to adjustment. in which case, refer to that little scuffle, what was it called? Oh yeah, the civil war! Ending slavery required adjustment to the delineation of powers.

    So, please read the rest of the conversation.

  • Gary Ciaccio

    Where is Social Security

  • Anonymous

    Then who is collecting the interst Oh Mr. Bright One?

  • Dude

    Per Fact Check – the bigggest holders of US Debt are Social Security at 16%, Other Federal government organizations at 13%, Federal reserve at 12%, China at 8%, Japan at 7%, Other foreign holdings 19%, State and Local governments at 3%, Mutual Funds at 6% and “all other” at 17%. – So there you go, its not the proverbial 1 pct. The facts do not support your thesis.

  • Anonymous

    So the PRIVATE federal reserve holding 12% of about a $17 trillion debt means nothing to you? There shouldn’t be anyone but the US government holding the debt.

  • Dude

    You said the “1 pct” was getting all the interest. I showed you that is not correct. Sort of the end of the story.

  • Jeromy Earnest Henderson

    Social security is a seperate tax that funds itself.

  • Jeromy Earnest Henderson

    Social Security is a separate tax that funds itself and is not therefore considered in federal tax accounting.

  • the7thson

    Social Security is, in fact, NOT a separate tax that funds itself. The money taken from your check for Social Security is not put into a separate account. That money is dumped into the general revenue stream. Regardless of what bookkeeping trick the feds may use, they are spending your Social Security taxes on general spending. The Social Security “lock box” is a myth.

  • Jeromy Earnest Henderson

    Look at a paystub Federal Taxes, Social Security, and Medicare are all differentiated because they have their own tax rate. They are intended to fund seperate accounts/ funds within the system. It’s kind of like one company operating 3 seperate businesses. One business is not responsible for the others debts. Nor should they have access to the others surplus. That’s how they can how all of these groups can estimate when the SSI and Medicare accounts will go bankrupt. Think before you speak again. It’s not an account trick it’s acceptable accounting practice.

  • Anonymous

    You think failure to engage in the process, or engaging via non-engagement, is the answer? Just curious. If you’re suggesting we need a viable 3rd party (not some nonsensically funded Koch brothers Tea Party) I completely agree. Is a third party feasible? very very unlikely given the restrictions the DNC and GOP have placed upon such an option. Add to that the inability of third party candidates to garner media time and to even gain a seat at the debate table and it seems impossible.

  • Cicero31

    Well, no. But I do have it on my list of movies to see, right between The Return of the Body Snatchers and Godzilla 4.

  • Andrew C Livingston

    Lavish loans and grants? You’ve got to be kidding. Student loans in the US are at market rates, therefore they are not lavish by any stretch of the imagination. As for grants, what grants exactly are these?

  • DrDon

    “Everyone knows” we give away billion$ in “foreign aid” and in polling it’s one of the few things most people want to cut. Where is it on this graph? (I know it’s a drop in the bucket compared to what people think but still, it should be on here.) Also, does “military” include all the billion$ we give e.g. to Israel and Egypt? Or the expenses of NATO? Interesting that Obama has just ask our NATO allies to raise the military spending share of their budgets to the 2% level, which is what the treaty calls for–would that help the US to lower the 27% percent of our tax monies we spend on “military?”

  • Anonymous

    Social Security is an insurance program. It’s not part of your federal taxes. It’s not contributing to the deficit in any way. It’s something you pay for your future. Or have taken from you to pay for the tax cuts for the rich, as the government is fond of borrowing from the SS trust fund.

  • wooooozee

    by welfare – are you including corporate welfare also the7thson? if so, the number is quite high. if not, it is included in the government category.

  • Anonymous

    Please do your homework. SS is NOT funded by taxes.

  • Anonymous

    It is completely arse backwards. But think about profiteering taking place with our top two tax expenditure.

  • Ernest Crunkleton

    It’s left out because its a fabrication, a talking point based on reframing the argument, tax rates are much higher at the lower income brackets. Although you are semantically correct in saying that 5% of 20 million dollars is much greater than 20% of 25 thousand. Its the production of those min wage workers that are responsible for all the income at the upper levels of society, some would argue that what capitalists call “job creators” (the rest of the world calls them parasites since they produce nothing) are really no more than freeloaders since they provide no real benefit to society other than to claim to own the rights to the fruit of the workers labor.

  • Anonymous

    Where’s the NSA budget?

  • Anonymous

    CIA, FBI, Homeland Security, ATF, etc…?

  • Anonymous

    I put mine under my mattress…

  • James Roach

    With Sagan and Vidal, circa the late 1990s and early 2000s , I agree that if the Pentagon budget were cut in half, it would do nothing to weaken US security. On the the contrary, it would strengthen our long-term prospects. The crucial figure here is our military expenditures compared to the aggregate of that of despotic or hostile regimes from which we can reasonably expect some chance of aggressive acts that call for immediate large-scale deployment. About all we’re up against now is Putin’s Russia and N Korea, the regimes of which are so weak economically, or so dependent upon exports to benign regimes, that their bordering states & alliances thereof, the EU and S Korea & Japan, can easily afford to take care of themselves against hostile acts. Long overdue is the time for pulling the plug on the whole post-WWII Cold War scheme of defending the West, because the whole world has since become so Westernized that the foe we’re armed against is largely a ghost of the past.
    And as for Syria, piracy off the coast of Somalia, scattered terrorist sickos here & there, and whatever remains of rancorous despotism in SE Asia, we can easily afford to police against all of that with even a tiny fraction of half of our present military expenditures.
    China, by the way, I cannot take seriously as a long-term strategic threat. This is because the people of China now largely agree with liberal Americans, such as myself, when it comes to the obnoxiousness of arrogant, hypocritical, secretive, or control-freak officialdom–private or public. They like that kind of crap as little as Thomas Paine did, and that is a very good thing, call the attitude Eastern or Western or whatever you will.

  • Anonymous

    My guess is that foreign aid is part of the 1.5% in International Affairs.

  • Anonymous

    Social welfare spending (as opposed to corporate welfare) is likely parts of the Housing and Community (rent assistance), Health Care (Medicare and Medicaid), Unemployment and Labor (retraining), Food and Agriculture (food stamps). The Social Security question has me stymied, unless this story is only counting certain parts of the taxes the feds take out of my check.

  • Anonymous

    Have you looked at a pay stub since the program was enacted?

  • Anonymous

    Yes…would like to add, The Federalist Papers are not ONE specific document, but were a series of article written by John Jay, Alexander Hamilton and James Madison, to promote the ratification of the Constitution. They were like PR, and have no legal sway on this country. They are not even a framework for the constitution. Jay and Hamilton were Federalist and Madison was a Democratic Republican. The Democratic Republicans were started by Thomas Jefferson and James Madison to oppose the Federalist, so much of what is in the Federalist papers is kind of like the Bible, in that, it doesn’t even have a cohesive message that is one sided, other than, We Need To Form A Government That Is A Democracy. They couldn’t even agree on what Democracy should look like. Why is it that so many people who bring up The Federalist Papers, don’t even know what they are?

  • Anonymous

    That two cents does more damage to our kids than any enemy could.

  • Red Cabbage

    People who use the phrase “Educate yourself” are complete and utter douche bags. Sorry, it’s true.

  • Michael Barnathan

    In theory. In practice, I doubt my generation will see a dime of it. At least it’s capped.

  • Will Rogers

    Yes our Military budget is out of control but the BULK of our debt is
    the welfare (SS and Medicare)…lets be honest here. BOTH need some
    SERIOUS trimming.
    Just search “national debt pie chart”…wikipedia has a much better breakdown.

  • Will Rogers

    Ron Paul said it best…
    ‘In the end its the Republicans who support welfare and the Democrats who support the warfare.’
    And no I did not misstate that. Boils down to ‘you give me this and I’ll give you that’ for every budget.

  • Mama Train

    Your forget all the expenditures that are not accounted for here. The NSA, Corporate welfare and foreign aid. Those numbers are bigger and not on the pie charts.

  • Disgusted with GOP

    The average taxpayer making $50,000 per year only pays $36 toward welfare–taking care of their neighbors who can’t do for themselves. That taxpayer pays another $6 for other safety net programs.

    They pay $870 for corporate subsidies, so that huge, rich corporations can do business in this country for free. They pay another $1,600 to offset corporate tax loopholes. They pay another $1,231 to offset losses from corporate overseas tax havens.

    So that $3,701 isn’t the problem. The problem is the $42 that supports poor or disabled Americans in America???

    Amazing.

  • Jack Daniels

    The problem with welfare isn’t really all cost anyway.. the real problem is what it does to people and communities. It makes the people lazy, unmotivated, and breeds future poor generations or criminals.. It ruins communities by keeping them riddled with drugs, crime, elective unemployment. It’s the sad truth. I want our bad areas fixed… I don’t care about 36 dollars. Take that 36 and put it toward the broken public education system, and the broken college system in our aristocracy **cough** I mean country.

  • Anonymous

    You are totally misinformed by the rightwing think tanks and postmodern version of economic spin to protect the 1% from taxation. SS, Medicare and Medicaid are 100% paid for by payroll taxes. The real budget is funded by Income Tax Revenues and Excise Taxes. Expenditures of the real budget (outside of SS, Medicare and Medicaid) are $1.437 trillion. 44.3% goes to the Military, 16% to Interest on the Debt (Banksters), and 5.4% goes to “Welfare” – housing subsidies, food stamps and other services. Corporate and 1%er Welfare in the form of tax breaks and subsidies meanwhile is the real problem with 200 – 400 billion in tax breaks and tens of billions in corporate subsidies. Like most Americans, you’ve been duped.

  • Anonymous

    Robin… your NPP data display is a confusing, unclarified mess that leaves more questions than answers. Even though politicians changed how the budget is calculated to include SS, Medicare and Medicaid, truth is those three are fully paid for by payroll taxes and should not be included in investigating income and expenditures. Income and Excise Taxes are the Revenues. Your numbers do not add up or indicate when money is coming and going. Not only are you doing poor data analysis, you are making confusion. The truth that does not come through is that 60%+ of Income Tax Revenues goes to Defense War and HS, while only 6% goes to “Welfare”. Again SS, Medicare and Medicaid are not welfare. And Interest on the Debt…money to the banksters is over 16%. There’s little left for public services but your crappy data analysis does not point this out. Booo!