What could you do with $10,000? If you're thinking something like buy a car, throw a big party, go on a once in a lifetime vacation, buy 834 copies of John Oliver's Marlon Bundo book, you aren't alone. Unfortunately, it's more likely that this week $10K of your money is going to the federal government instead. Tomorrow is TAX DAY (...woot?), and the average American family pays around $10,000 to the IRS per year.
But, hey, maybe that IS buying you lots of fun stuff? Let us tell you where it all goes.
(Depressing 2018 disclaimer: These are estimates based on previous years and, for all we know, Trump could spend all his money hiding his pee pee tape. Here's hoping he doesn't!)
Social Security: 24% You'll notice, unless you make more than $100K, that SSI taxes make up quite a big chunk of your withholdings. (After ~$100K, SSI liability is capped, meaning those that earn more pay SIGNIFICANTLY smaller percentages towards SSI). On average, a quarter your tax money goes to the Social Security System, providing benefits to ~40 million retirees, survivors benefits to ~9 million, and disability benefits to another ~10 million. It's worth remembering that today's retirees have paid into this system for their entire careers, so the benefits aren't exactly "free," but they are vital to protecting the elderly, injured, and needy.
Healthcare and Insurance: 26% The four health insurance programs of Medicare, Medicaid, the Children's Health Insurance Program (CHIP), and the Affordable Care Act (ACA) marketplace subsidies make up another quarter of the budget. More than half that goes to Medicare, which provides health coverage to around 57 million people who are either over 65 or disabled. Medicaid and CHIP provide health care or long-term care to about 74 million low-income children, parents, elderly people, and people with disabilities.
Defense: 16% A big chunk of the budget goes to support defense and security related international activities - this 16% of the total budget accounts for 57% of the Federal government's discretionary spending (money that isn't earmarked for specific purposes like Social Security). Most of this money goes to fund the Defense Department which includes supporting operations in Afghanistan and other oversea operations. Probably some intelligence work as well. At least we hope...
Income Security: 9% About a tenth of the budget goes to programs that provide aid to individuals and families that face hardship such as food stamps, school meals, low income assistance, child care assisting, home energy bills and any other programs that aid abused and neglected children. These programs keep millions of individuals out of poverty each year.
Interest on Debt: 6% The government makes interest payments on the money it borrows. The debt is at $21 trillion currently and will probably go up into infinity. You can follow it here.
Education: 2% The government spends a very small amount on training, employment and social services for education. This category also includes all areas like research and higher education funding. No wonder we're all in so much debt! For comparison's sake, education get 6% of our discretionary spending, as compared to defense's 57%.
Science and medical research: 2% This contains general science, NASA and technology spending. Most of the spending in this area is left to private companies. (You know, then those companies overcharge us for the medicine they create as a result.)
Remaining 15% The rest of our discretionary spending goes to benefits for retired federal employees and veterans, transportation, infrastructure, non-security international, and other categories.