If you are still working on your state or federal income tax returns or an extension of time to file, good luck.
If you are among the Americans who already have filed 2013 returns, April 15 is no longer a dreaded deadline and you may have time to ponder what happens to your tax money.
An analysis released in March by the Center on Budget and Policy Priorities shows that the U.S. government spent $3.5 trillion in fiscal 2013, which ended on Sept. 30. About $2.8 trillion was financed by taxes and other government revenues; the rest — $680 billion — was borrowed, adding to the national debt.
In 2013, the U.S. government used 6 percent of its total spending for interest on the national debt.
There are only five spending categories that exceed interest on the federal debt, according to the center’s analysis:
- 24 percent for Social Security.
- 22 percent for Medicare, Medicaid and the Children’s Health Insurance Program. (According to the nonpartisan Congressional Budget Office, three-fifths of all that health care spending was for folks 65 and older, one-fifth was for people who are disabled, and one-fifth was for those under age 65.)
- 19 percent for defense and international security.
- 12 percent for safety net programs, such as nutrition assistance and child care for low-income workers.
- 8 percent in benefits to U.S. veterans and federal retirees.
- 3 percent transportation infrastructure.
- 2 percent science and medical research.
- 1 percent education.
- 1 percent non-security international assistance
- 3 percent everything else.
Taxes redistribute income, but not always in ways we expect. In a report released in December, the Congressional Budget Office analyzed the distribution of household income and federal taxes in 2010 and found that households in the lowest 80 percent of income had higher after-tax income than they did before taxes.
The 20 percent of households with the lowest income received 5.1 percent of total U.S. household income before taxes. After taxes, this group had 6.2 percent of total income.
Those in the middle 20 percent had 14.2 percent of all before-tax income and had 15.4 percent of all after-tax income.
At the top of the income scale, the wealthiest 20 percent of U.S. households had 51.9 percent of all before-tax income and 48.1 percent of all after-tax income.
Redistribution of wealth through income, payroll and other taxes provides health care and security for older Americans. It helps feed and house impoverished Americans of all ages, but it sure hasn’t made them rich. To read more about federal taxes and spending, check out cbo.gov.