13.4 C
New York
Wednesday, February 21, 2024
HomeWhere's the moneyHow Your Taxes Are Collected and Allocated

Revenue

The Federal Government took in $3.5 trillion for FY2019. The individual taxpayer — you — provides the bulk of this with payroll taxes coming in 2nd. Here’s how:

  • Income taxes contribute 45%.
  • Social security taxes are 34%.
  • Corporate taxes are only 12%.

Excise taxes, and others make up the remaining 9%.


Spending

For FY 2019, budget spending is estimated at $4.4 trillion — much more than the revenue being taken in. Over half of the budget must go towards Mandatory programs, such as Social Security, Medicare, and Military Retirement programs. These expenditures are mandated by law and cannot be changed.

Around 40% of spending goes towards Discretionary programs in which the President and Congress negotiate the amount each year. Half of the Discretionary budget is Military allocations.

The remaining 5% of spending goes towards interest payments on the national debt. The U.S. has been lucky because interest payments are currently meager, thanks to a flight to safety that has increased demand for Treasuries. When the economy gets better, Treasury yields will rise — and so will interest payments.

Discretionary Spending Discretionary spending is that part of the U.S. Federal Budget negotiated between the President and Congress each year as part of the budget process. Discretionary spending in FY 2019 is $1.30 trillion. The OMB has budgeted more than half ($881 billion) on

Security spending, which pays for the Defense Department, as well as defense-related functions of all other federal agencies. That leaves $491 billion to pay for all other domestic programs, like Housing, Education, and the judicial system.

Military Spending

For FY 2019, the U.S. budgets spending on security ($676 billion). Social Security ($1.0 Trillion), and Medicare and Medicaid combined ($1.053 Trillion),

Mandatory Spending

Mandatory Spending at $2.7 trillion in FY 2019. The most compulsory extensive spending programs are Social Security and Medicare. Social Security costs are currently 100% covered by Social Security taxes.  However, the Board of the Social Security Trust Fund estimates that it will be depleted between 2037 and 2041. Social Security revenue will cover only 75% of the benefits promised to, and earned by, retirees. Medicare is already underfunded. Medicare taxes don’t pay for all benefits, so this program relies on public tax dollars to pay for its portion.

51 COMMENTS

LEAVE A REPLY

Please enter your comment!
Please enter your name here

- Advertisment -spot_img
[td_block_1 custom_title="Must Read" limit="4" f_header_font_transform="uppercase" ajax_pagination="next_prev" block_template_id="td_block_template_2" m4f_title_font_family="394" m4f_title_font_weight="700" m6f_title_font_family="394" m6f_title_font_weight="700" sort="modified_date" offset="4" m4f_title_font_size="eyJhbGwiOiIyMCIsImxhbmRzY2FwZSI6IjE4IiwicG9ydHJhaXQiOiIxNiJ9" m4f_title_font_line_height="1.3" category_id="121"]
spot_img