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You’re not going to be happy when you see where all your tax dollars are going

IRS

It’s pretty unreal when you see it.

Your 2013 tax dollars — which are due today — went primarily to pay for government benefits.

Major entitlements (Medicare, Medicaid, and Social Security) gobbled up 49 percent, while more federal benefits took another 20 percent. These additional “income security” benefits include federal employee retirement and disability, unemployment benefits, and welfare programs such as food and housing assistance. Obamacare spending didn’t really kick in until 2014, so that will show up in next year’s breakdown.

See how this compares to last year’s breakdown: National defense has been cut, while the major entitlements picked up an even larger percentage.

Is this where you expect the government to spend most of your money?

Romina Boccia of The Heritage Foundation reminds us how we ended up in this situation:

Everything changed when the U.S economy crashed in 2008. Job losses and a drop in personal income led many more Americans to rely at least temporarily on government programs to make ends meet.

… But the worst is yet to come: The Congressional Budget Office projects that public debt will reach an economy-crushing 100 percent in less than one generation. Unlike the unpredicted drop in U.S. fiscal health brought about by the recent recession, this time, structural problems are driving the decline.

Those “structural problems” Boccia mentioned are on display in the chart above. The federal budget is structured around entitlement programs—and they don’t leave room for much else. Here’s a sobering thought: “The federal government could cease all other operations, including its core constitutional duty to provide for the national defense, and would still end up in a fiscal hole within a generation.”

That’s right—we’re on track for all our tax money to go to Medicare, Social Security, Medicaid (including the Children’s Health Insurance Program and Obamacare), and interest on the debt. Don’t forget the debt. Your 2013 tax dollars covered only 80 cents of every dollar spent by the federal government. The other 20 cents were borrowed from younger generations.

This is why Heritage advocates entitlement reforms—we need to free our economy from these weights dragging it down. And that doesn’t mean we leave beneficiaries high and dry.

Where would you like to see your federal tax dollars go? Let us know in the comments.

BONUS TAX FACT:

Did you give the government an interest-free loan from your paycheck this year? If you got a tax refund, you did. Heritage’s Rachel Greszler looked at the numbers: The average tax refund in 2013 was $2,755. That’s $230 per month that a family could have been using.


Amy Payne is Editor-at-Large of The Foundry, The Heritage Foundation’s blog. She writes and edits the “Morning Bell,” one of Washington’s most widely read and influential e-newsletters. Follow her on Twitter @AmyMPayne.

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