Taxes: It's The Most Wonderful Time of the Year!

Income tax return filing season is here! With taxes on the minds of many Americans, the Center on Budget and Priorities recently analyzed where Americans’ dearly departed tax dollars go.

The federal government spent $2.7 trillion dollars this past fiscal year, which accounts for about one-fifth of the Gross Domestic Product. Most of the budget went to social security (21%), major health programs (19%), and (no surprise here) defense and security (21%). As the Center on Budget and Priorities writes, “$557 billion went to pay for defense, homeland security, and security-related international activities. While more than $100 billion went to support operations in Iraq and Afghanistan, the bulk of spending in this category reflects the underlying costs of the Department of Defense and other security-related services.”

Other points of interest: 9% (or $227 billion) went to the interest on the national debt (our lovely $8.6 trillion debt), 4% on education, and 6% on benefits for federal retirees and veterans.

The author of the study put it best:

While “government spending” is often decried, it is important to look behind the rhetoric and determine whether the actual public services that government provides are worth paying for. To the extent that such services are worth paying for, the only way to do so is with tax revenue. Consequently, when thinking about the costs that taxes impose, it is essential to balance those costs against the benefits the nation receives from public services.