Tax Season is Upon Us – We Supply the Money but We Can Only Influence How it is Spent in an Election Year

Jessica SarterSmall Business

Tax Season is Upon Us

Where does the money come from?

According to the National Priorities Project (www.nationalpriorities.org.), the federal government is expected to collect approximately $3 trillion in tax revenues for the 2014 fiscal year. Approximately 80% of this comes from individual income taxes (46%) and payroll taxes (34%), 11% from corporate taxes and the balance from items like excise taxes and custom duties.

As we have heard debated constantly, the government operates at a deficit and therefore must borrow money by issuing treasury bonds to make up the deficit estimated to be approximately $616 billion for 2014.

 

How is our money spent?

Approximately 64% of the money is allocated to mandatory spending items such as social security, unemployment, Medicare and health, veterans’ benefits, transportation and food and agriculture.  Interest on federal debt accounts for 6% and the balance of 30% for ‘so called” discretionary spending on items such as military, education, international affairs, government, energy and environment etc., with military accounting for close to 60% of the discretionary portion of the budget.

 

The President in his State of the Union Address talked about closing tax loopholes to help fund job growth. While not technically an expense, tax breaks account for over $1 trillion per year, approximately equal to all of the discretionary spending in the 2014 budget.

 

Could Our Dollars be Better Spent?

That of course depends upon your priorities but to give some perspective; the following are some estimates of hourly spending reported by the National Priorities Project:

  • Approximately $10.45 million per hour  for the war in Afghanistan
  • Approximately $60.71 million  per hour for the Department of Defense
  • Approximately $1.61 million per hour  for foreign military assistance
  • Approximately $6.82 million  per hour on Homeland Security
  • Approximately $8.16 million  per hour  on education
  • Approximately $3.23 million per hour on the environment
  • Approximately $13 million per hour for food and nutrition assistance
  • Approximately $30 million  per hour for Medicaid and Children’s Health Insurance Program
  • Approximately $4.76 million per hour for housing assistance.