As Tax Day looms, many Americans might find themselves wondering what Uncle Sam does with all those federal taxes they just paid or are about to pay.
After all, the latest numbers from the Internal Revenue Service show that taxpayers collectively paid $1.37 trillion in individual income taxes in 2014, as the nonprofit Tax Foundation reported recently.
With tax year 2016 in mind, the Pew Research Center examined how the federal government spends its money.
The nonprofit — a self-described “fact tank” — looked at the nearly $4 trillion that the federal government spent during fiscal year 2016, which ended Sept. 30. Here’s how it broke down:
- Social insurance — such as Social Security, Medicaid and Medicare, unemployment compensation and veterans benefits: About $2.7 trillion, or more than two-thirds of all federal spending
- National defense: $604 billion, or 15.3 percent
- Net interest payments on government debt: About $240 billion, or 6.1 percent
- Education aid and related social services: About $114 billion, or less than 3 percent
Everything else — which includes crop subsidies, space travel, highway repairs, national parks, foreign aid and a lot more — accounted for the remaining 6 percent of federal spending last year.
The Pew Research Center notes:
When thinking about federal spending, it’s worth remembering that, as former Treasury official Peter Fisher once said, the federal government is basically “a gigantic insurance company,” albeit one with “a sideline business in national defense and homeland security.”
However you might feel about how Uncle Sam spends his money, if you wish you could keep more of your money in your pocket this time of year, you’re in the right place. You can learn all about slashing your taxes — legally, of course — on Money Talks News.
If you have yet to file your 2016 taxes, start with “5 Last-Minute Income Tax Filing Tips to Save You Money and Stress.”
If you have already filed, check out “Tax Hacks 2017 – 9 Smart Ways to Spend Your Tax Refund.”
Then get to work fattening your refund for tax year 2017:
- “Maximize Your Tax Refund by Choosing the Right Tax-Filing Tool“
- “Tax Hacks 2017: Don’t Miss These 16 Often-Overlooked Tax Breaks“
- “4 Mileage Tracking Apps That Can Help Reduce Your Tax Bill“
What’s your favorite tax hack? Let us know below or on Facebook.