Politics

In 1 Graphic, Here’s What Uncle Sam Is Doing With Your Tax Money

 

Last month rapper Cardi B asked a slightly more profane version of the same question many Americans ask when they file their taxes.

“Uncle Sam, I want to know what you’re doing with my tax money.”

That’s a good question. The average American household sends more than $20,000 to Washington in tax revenue each year, and most see little in return.

In 2017, the federal government nabbed more than $3.3 trillion in taxes—but that still isn’t enough to satiate Washington’s immense appetite for spending. The 2017 deficit was a whopping $665 billion.

So where do our tax dollars go?

Some believe most of it goes to welfare programs and foreign aid. Others believe defense and corporate subsidies dominate the budget.

In reality, health entitlements—Medicare, Medicaid, Obamacare—and Social Security are the largest programs. If Congress continues its current policies, these entitlements and interest on the debt are set to consume every dollar of taxes paid by 2027. That’s less than 10 years away.

Right now,  federal health programs such as Medicare, Medicaid, and Obamacare subsidies currently consume 28 percent of the budget. Federal health spending is projected to grow on an unsustainable trajectory of 6 percent per year over the next 10 years. That growth rate is about three times the projected pace of economic growth over the same period.

Meanwhile, Social Security, the single largest federal program, accounts for roughly a quarter of all federal spending. Its trust funds are already paying out more than they take in, and as more people retire, the system will face continued stress.

Without reform, the program’s trustees project benefits will need to be cut as much as 23 percent if nothing is done by 2034.

In the meantime, rather than slowing down, spending on all these programs is expected to dramatically increase in the near future. Combined annual spending on health entitlements and Social Security is projected to grow by 89 percent over the next decade.

Other income security programs—veterans’ benefits, food and housing assistance, federal employee retirement, and disability—account for 17 percent of the budget, surpassing national defense spending.

The defense budget covers everything from military paychecks, to operations overseas, to the research, development, and acquisition of new technologies and equipment.

At 15 percent of the federal budget, defense spending is the last major category of federal spending and has been falling as a percent of the budget for the last decade.

And the rest?

Well, interest on the debt is one big culprit.

Over the coming decade, U.S. debt held by the public is projected to balloon to over 96 percent of gross domestic product—driven primarily by health and Social Security spending. As the size of the debt grows, so will the interest costs.

Currently, 7 percent of the budget is spent on interest—money that takes away from other priorities. But in just five years, interest spending is projected to exceed national defense.

Deficit spending has many costs. Economic growth tends to slow in countries with debts that are comparable to the size of the economy, a group the U.S. is quickly joining. As the debt increases, so does the cost of the interest we must pay to those who hold the debt. China is currently the largest foreign holder of U.S. debt.

Without reforming America’s massive and growing federal programs, Washington will have to continue to borrow increasing amounts of money, piling new debt onto younger generations and worsening the nation’s already unsustainable economic course.

Some people will tell you that the recent tax cuts are to blame for our fiscal challenges. However, in 2018, total tax revenue is projected to increase by $22 billion. In dollar terms, tax reform was only a cut in the growth rate of revenue collection and not actually a decrease in total dollars collected by the IRS. By 2025, revenue growth will return to pre-tax reform levels.

The growing deficit is caused exclusively by more spending—every year after 2018, tax revenue is projected to grow faster than the economy.

Growing government spending threatens higher taxes on current and future taxpayers. Without serious spending reforms, taxes will go back up. Congress made much of the tax cuts temporary. After 2025, when many of the tax cuts expire, tax revenue jumps back to its pre-tax reform levels. Eventually, rising debt will leave lawmakers with limited options to avoid a financial crisis. Unless we can reverse course, it is only a matter of time before the taxman comes knocking.

In the words of Cardi B, “What is y’all doing with my f—ing money? I want to know. I want receipts.”

Increasing taxes is not the solution. Washington already takes too much of the money that Americans work hard to earn. Congress must rethink how it is spending the people’s money.

From - The Daily Signal - by Adam Michel and Justin Bogie

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garfreak

When did something I have paid for–Social Security and Medicare- become an entitlement? Oh, yes, when the Democrats took the money from the supposedly safe trust fund and put it in the national treasury.

Trish Ryder

Why does everyone in politics say that Medicare and Social Security are entitlements?? I have been working since I was 16 and have had both Medicare and Social Security taken out of my paycheck…in my thinking that is MY money being put in so that I am able to use it when I reach the age of retirement. In my mind, it is and has always been my money and NOT an entitlement????? But everyone seems to say it is!!! I realize there are an abundant amount of people (illegals and people that have never worked) using my money that do not and have not ever put into the system, but yes that would be an entitlement to them. IT IS NOT FAIR!!!!! And I get so disgusted with the whole government system at work!!!! To me the Social Security I receive is my lifetime of putting into the system!!!!!

Phyllis

If the government had not stolen our social security and had not given it to undeserving people, there would be no problem there.
I think people should start voting in more business oriented Congress critters and less lawyers, doctors and those who can’t do anything except make a career out of being a congressman/woman.

PaulE

I like how you refer to SNAP (food stamps), welfare, Section 8 housing and the rest of the plethora of welfare programs in this country as “income security”. At 17 percent of the total budget, that is a lot of wasted federal tax dollars. Tax dollars that the actual federal taxpayers in this country have to pay for. While I realize that your intent is to be part of the “cut SS and Medicare crowd”, as that is the clear emphasis both the article and the graph focus on, there is a whole lot of money that could be trimmed from the federal budget if you instead focused on our exploding welfare programs. What your graph refers to as “income security”. This is the kind of graph I would expect to see from AARP or splashed across the screen on CNN or MSNBC, while a RINO or a Democrat bemoans… Read more »

Walter

Social Security is the largest PONSI scheme ever perpetrated on mankind. Q: Why was the original retirement age set at 65? A: The average life expectancy at the time was 58.6 years. Q: When did the politicos start stealing from the SS Trust Fund? A: Day 1. If any of us had invested the same amount of money, in the same time frame as we paid SSI, into an average mutual fund, we would have been millionaires by age 60. Several years ago they raised my retirement age by 1 year, to age 66. Why did they not raise it to 70? Why have they done little to nothing to resolve this problem? Answer: They don’t have the spine for it. For those who have time, you have a choice: Take care of your own future, or wait on Uncle Sam to fix the problem. For us older folks, I… Read more »

Brian

Medicare and Social Security are not entitlements for me. I contributed to SS for 40 years and I pay for Medicare monthly. These writers need to be more comprehensive in their investigation and documentation. It is an insult that they think that the government is giving these moneys away. They should focus on how are taxes are going to wasteful and multiple agencies, including exccess retirement to elected officials.

Rexford O Ames

Interesting Graph. I do have a question concerning the Medicare / Obamacare or (Affordable Care Act?). Seniors of this country pay an average of $104.00 to $124.00 dollars monthly into Medicare from our Social Security. That is taken out before anyone gets their Social Security check. Now with the additional Taxes and the amounts taken out for medicare. Why the double payments? Next question: Is Medicare and the Affordable care act or Obamacare combined or separate programs? Does Obama or any politician or bureaucrat get any of those funds for distribution ? Do the political parties get payments from those bills and is that why 99% of those politicians that reside in Congress in both the House and Senate ” Millionaires” ?

janmarie

I am not interested in cutting what you call entitlements. They are NOT ENTITLEMENTS. We paid for them. I AM INTERESTED IN CONGRESS PAYING BACK ALL OF THE MONEY THEY STOLE from Social Security … and if they pay back what they took it is solvent. Even if they don’t pay back interest. We are NOT all IDIOTS. We know they took it and they need to pay it back.

Elena Tellez

Social security for RETIRED Americans who paid into the fund for many years is an EARNED ENTITLEMENT — not a gift. But most of us are living so long these days, thanks to better diet / exercise and good medical care, that we are exceeding the payments we made to the system. So actually, the workers’ FICA taxes today are supporting the older people on ss — the program, as is, is not sustainable. America must cut its spending — drastically. There will be much hew and cry, since so many industries and non-profits are used to getting massive government grants. When we were flush with money (or thought we were), I guess that was OK — but it has to stop now — so does foreign aid to our enemies — unless it is buying America benefits — and then it is not AID, but commerce. We must go… Read more »

Nicholas T Pappas

Social Security is NOT an intilment! We have and are paying in to this fund.

Ovide

Amen. Anyone who calls Social Security an entitlement, is drinking the “cool aid” being spewed from “the swamp”. It is those who comprise the “swamp”, responsible for the circumstances our country finds itself in today. Wake up, people!

John V

Social Security is NOT and entitlement. I paid into it for 60 years and I am still paying. I will never get back the money I paid in. I EARNED what I am getting back and the Dems destroyed the reserves. Hitler’s game plan is in play and the end of the free world is closer than we think.

antimarxist

I believe it was Atty Genl Jack Kennedy(another one of that worthless clan), who was made famous for prosecuting the mafia for raiding their pension funds. I have always wanted to know when then is it ok for the politburo to raid their retirement fund(social security). They should all be locked up and all assets confiscated and returned to the social security “trust fund”.

Beholden

The authors need to respond to the overwhelming complaint about this article – that Social Security and medicare, paid for in excess by its ultimate recipients – are NOT entitlements.

Liz

Since when is Medicare and Social Security an entitlement? Last time I looked we the working people who pay taxes have the monies automatically taken out of our salaries( required by law) and we still have expensive Medicare costs and it isn’t cheap! They take Social Security out as well! All the govt does is use our money and pay for their perks , legal costs , pensions , Taxes including school and property should be illegal. They just keep robbing us blind. We work hard ,pay are taxes , obey the law and we still barely make ends meet. Illegals should get not one red cent from the hard working law abiding citizens in this country.. they are the main reason we pay these high taxes!

Joyce

Social Security IS NOT a benefit in the sense that welfare is. It was originally designed as an insurance policy and workers PAY FOR IT. until Congress started messing with it.

Frank S Crawford

The elected people of our house and senate along with the president group have from Roosevelt to today have borrowed from the Social Security funds to run the government but have not once put any money back into Social Security fund. These people of the house and senate need to have thier own retirement, heal insurance and pay checks reduced by 70% and only be able to hold the office 2 terms. If they worked for a living they would know how to manage money.

Rosemary

Medicare and Social Security are not entitlements; we paid! Money should be there, unless taken! What percent is Obamacare? Over inflated premiums!

David Wedding

I have to strongly disagree with this graphic because medicare and social security are not now or have never been an entitlement. People that have worked their entire working life have paid into these funds. Paying into something and then receiving it back in payments is NOT AN ENTITLEMENT!

trailrunnerjay

Exactly how much money was collected by the government for Medicare and Social Security in 2017? This is our money…. not entitlements.