Most Taxes Pay For Popular Programs

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By Kay Bell for Bankrate.com

Taxes are the price we pay for a civilized society, according to the late and legendary U.S. Supreme Court Justice Oliver Wendell Holmes Jr.

Most of us paid our annual bills for civilized living on April 15. But just where does our money go?

If you listen to some of the politicians on or who want to be on Capitol Hill, you might think that most of your money goes to finance the United States' federal deficit. Or you might think, based on the comments of other lawmakers and those who want to take their seats, that our taxes underwrite ne'er-do-well "takers" just living off our hard work.

The reality is that all of us are benefiting or one day will benefit from federal programs we pay for with our taxes.

The big three budget areas

Social Security, Medicare and Medicaid health programs and national defense account for most of what Uncle Sam spends.

That was the finding of several public policy groups that, as Tax Day 2014 neared, looked at how the money that the IRS collects is divvied up.

One of the more detailed analyses comes from the Center on Budget and Policy Priorities, or CBPP. Analysts at the Washington, D.C.-based nonprofit think tank based their estimates of spending in fiscal year 2013 (Oct. 1, 2012, to Sept. 30, 2013) on the most recent historical data released by the Office of Management and Budget.

The Center's numbers show that Social Security accounts for 24 percent of federal spending. Medicare, Medicaid and the Children's Health Insurance Program, or CHIP, which offers federal health care for qualifying kids, take another 22 percent. U.S. military forces get 19 percent.

Those areas account for almost two-thirds, 65 percent, of our federal spending.

Remaining federal expenditures

The only other sector getting into double budget digits, according to CBPP, are safety-net programs at 12 percent of federal spending. These include unemployment insurance and nutrition programs such as food stamps, issues that prompt bitter debate in Congress.

The country's federal debt, another favorite of political demagogues, requires just 6 percent of our tax dollars.

The remaining 18 percent of taxes, notes CBPP, is parceled out among such things as the U.S. infrastructure (roads and bridges), education, health and science research and benefits for federal retirees and veterans.

What do you use?

Do you, any of your relatives or friends use any of these services?

My mom, a 78-year-old widow, relies primarily on Social Security. The roads I drive on to visit her are kept up in part by federal money; personally, I would like to see a few more dollars go into this account. And work done by scientists at the federal Centers for Disease Control and Prevention help ensure the safety of the shots that kept my mom and me well this flu season.

Yes, there is waste in the federal budget. And yes, federal spending should be carefully reviewed and thoughtfully debated before it is approved.

Before you go willy-nilly demanding indiscriminate cuts like so many politically motivated legislators, take a minute to look at exactly what you get for your tax contributions and what you're really willing to give up.

This article was originally published on Bankrate.com.



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Personal Finance , Taxes , Insurance , US Markets

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