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  • Writer's pictureDurham & Durham

What Do Your Federal Tax Dollars Pay For?

You might have guessed it… the largest portion is Social Security & Medicare. Followed by social programs, national defense, community development, interest on debt, and finally law enforcement.

33% to Social Security & Medicare, & other retirement:

  • These programs provide income support for the retired & disabled & medical care for the elderly.

25% to social programs:

  • 18% to Medicaid, SNAP, Temporary Assistance, etc.

  • 7% for Health Research, Unemployment, Public Health Programs, Assisted Housing, & Social Services.

17% to National Defense, Veterans, & Foreign Affairs:

  • 12% to fund National defense activities like to equip, modernize, & pay our armed forces.

  • 4% for veteran services & benefits.

  • 1% for international activities & the maintenance of US Embassies abroad.

14% Physical, Human, & Community Development such as:

  • Agriculture, natural resources, environment, transportation, education, community development.

  • Space, energy, & general science.

7% Net Interest on the Debt

3% Law Enforcement & General Government

How do these get decided?

Before the first Monday in February the president is required by law to submit to Congress a budget proposal before the fiscal year that begins in October. Congress then reviews the proposal & makes changes.

How does the US generate income?

  • 42% Personal income taxes

  • 24% Social Security, Medicare, Unemployment, & other retirement taxes

  • 22% Borrowing to cover deficit

  • 7% Corporate Income Taxes

  • 6% Miscellaneous Taxes

In fiscal year October 1, 2021 through September 30, 2022, federal income was $4.897 trillion and outlays were $6.273 trillion. Leaving a deficit of $1.376 trillion.

*Numbers might not total 100% due to rounding.

Information cited from:

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