An itemized tax receipt - May 2012
We all have deadlines that we live by, but one of the deadlines most American's share with each other is the deadline to pay taxes.
April 17th was this year’s deadline and interestingly enough this was also the same day as “Tax Freedom Day” for the average citizen in our country as calculated by the Tax Foundation. In other words for an average American citizen, they would have had to dedicate 100% of their income to paying federal and state taxes from January 1st to April 17th. After that they can use the rest of the year to earning money to pay for their homes, food and other important expenditures.
Most Americans pay their taxes and many complain about the high cost of the Federal Government. Some will select a particular federal program to vent their ire as to why taxes are too high, but at the end of the day, most of us don't really know what takes the biggest chunk of our check to the U.S. Treasury.
A couple of years ago I ran across an organization which advocated that Americans receive a receipt from the federal government outlining what their taxes pay for. The organization “Third Way” has updated their “receipt” for 2011 and I thought I'd pass the information along.
Whether you want a receipt or not for your tax payment, it is instructive to see where the largest portions of your tax dollars are spent. This is also where you will want Congress to cut if you want to see some meaningful reductions in the federal deficit.
OK, so what did you buy this April? If your average tax payment was $5,400, you would have spent 20.3% or $1,095.34 for Social Security. Defense would have taken 20.2% of your check or $1, 088.01. Medicare 13.5% or $728.03. Low-income assistance would take $494.17 of your $5,400 or 9.2%. Medicaid – 7.6% or $412.12; Net interest payments-7.4% or 399.07. From there on out the numbers drop off pretty quickly. Of note, especially with the recent discussions on the Farm Bill is that agriculture's share of your check is 0.7% or $39.03.
There are a couple of of other “receipts” out there with one of them being from the White House, so you can get a couple of different takes on this, but still Social Security, Medicare and National Defense are in the top tier.
Whether we like paying taxes or not, it certainly is important that all of us understand where the money goes. As our federal deficit continues to balloon, it will also be interesting to see how fast the interest payment moves up the list.
By Ken Hamilton, Wyoming Farm Bureau Federation Executive Vice President