Friday, April 15, 2011

Where Do the Taxes Go? Or, Why Our Government is Broken.

Over at the White House's website, they've got a nifty little calculator that tells you, to the penny, where your federal income taxes, Social Security taxes, and Medicare taxes go once the government gets its hands on them.

It's kinda fun, thinking that, for example, that 1.2 percent of the federal income taxes I could have theoretically paid -- the numbers you'll see in this figure are an approximation of what I might have paid, but not actual numbers -- went to NASA and other science programs.

Except it doesn't work.

Here's what happens: As the year progresses, the federal government collects may taxes. And because the federal government is like a six-year-old with his allowance hot in his pocket while he's in the toy aisle at the dollar store, that money gets spent as soon as it hits the pan.

Then, when I file my taxes -- and you'd better believe your sweet chunk that I file them early -- I get all of my income taxes back, and then some, because of those wonderful things called dependents and deductions. We have three kids. Dependents mean instant tax savings. My wife's going to school. That means a lifetime education tax deduction. Then there's this and that and the other thing and at the end of it all, I'm getting back from the federal government more than I paid in federal income taxes.

So that leaves them with a conundrum: They're suddenly looking at a bank account where their checks to NAZA and the military and such are going to bounce. So, naturally, they look at the pots of money they took from me and didn't give back -- Social Security especially -- and say, um, we've got some rubber checks coming. Couldn't we just borrow  . . .

And they do. And they borrow from other folks, because they certainly don't want that check they just mailed to me to bounce unless they want to hear from my senator who is busy spending the money I'm sending to Washington on projects in my state and then letting the feds worry about those bouncing checks because, hey, they're the ones spreading that money around in the first place.

Now we've got politicians who are looking at this situation and saying it's unsustainable. Well, it is sustainable if they increase taxes or cut spending or do a combination of whatever. But because they're politicians and have to deal with hotheads like me who'll get all upset if the checks they're sending me aren't bigger than the ones I'm sending them, they do half-hearted little efforts that kinda almost don't solve the problem. But since they can make noise about cutting government waste or finding more ways to squeeze blood out of us turnips they score political points and the media loves them or hates them and we love or hate the media depending on what message they're sending us.

I look at it all, look at the money I send the government and the additional money they send back, and realize, as does PJ O'Rourke in "Parliament of Whores," that we are all doomed. Doomed.

According to Annie Lowrey writing at, there are a lot of geniuses out there who think this tax receipt calculator is just the bees' knees since it'll explain where all of our money goes and get us not focusing on aid to foreign countries and such, where they seem to think we all seem to think the money is going.

She writes:
According to the many proponents of tax receipts, such a breakdown should serve as a powerful corrective to our wild misconceptions about government spending. The foreign aid canard is perhaps the most outrageous and persistent, so much so that Obama actually mentioned it in his debt-reduction speech this week. Americans believe we spend about 25 percent of the budget—that's about $890 billion—on foreign assistance. They think that number should be 10 percent, so they are eager to put foreign-aid spending on the chopping block. But foreign aid makes up about 0.6 percent of spending. If you pony up six grand in federal taxes, just $33.97 goes overseas, according to Third Way's calculator.
Except there's no accounting for tax deductions that end up giving me more money than I pay in.

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