Where the money goes

In the fiscal year that ended just over 11 months ago (FY 2006) the federal government spent $2.655 trillion.

Here’s where the money went (in billions):

Department of Defense $499 18.8%
Homeland Security 31 1.2%
International Affairs 36 1.4%
All other discretionary 451 17.0%
Social Security 544 20.5%
Medicare 325 12.2%
Medicaid and SCHIP 186 7.0%
All other mandatory 357 13.4%
Interest 227 8.5%
Total $2,655

“All other mandatory” spending includes retirement programs other than Social Security, education and training programs, community grants, food stamps, farm subsidies, veterans benefits, etc. SCHIP is the State Children’s Health Insurance Program.

“All other discretionary” spending includes everything else the federal government does except defense, international affairs, homeland security, and social service programs. That would be agriculture, parks, printing money, courts, congress, prisons, space exploration, air traffic control, regulatory agencies, etc.

As you can see, only 38.4% of federal expenditures are considered discretionary. The remainder are entitlements — the Congress set up a program, established eligibility, and the rest is just distribution.

(Rounding keeps the total from being exact.)

Where the money comes from.

6 thoughts on “Where the money goes”

  3. Ephraim, NewMexiKen is just a casual one-person blog, so if you’re going to bring your stupid Rush Limbaugh and National Taxpayers Union crap around here and waste our time, at least come prepared.

    Not unexpectedly, your original source for the income tax gives an incomplete and biased story. Charts that show, for example, that the top 10% of income earners paid 68% of all income taxes are axiomatic. What was that same segment’s share of all income?

    It’s an income tax — those that earn income pay the tax.

    According to the Wall Street Journal, “In 2003 those high-income households [top 20%] earned 52.2% of income and paid 65.7% of taxes.”

    So, in fact, the wealthiest fifth do pay more than their “share.” This reflects the intended progressive nature of our federal income tax. The wealthy have a greater stake—and reap greater rewards—from our security and infrastructure; hence, the wealthy are expected to contribute a higher percentage to their maintenance.

    But, of course, it doesn’t work out that way. For the lower half of income earners, the FICA and Medicare tax are the preponderant taxes and those taxes—because they phase out above certain income levels—are regressive. As Warren Buffet, one of the richest men in America has noted, he was taxed at 17.7 percent on his taxable income of more than $46 million; his receptionist was taxed at about 30 percent.

  4. Its even worse. For investors, i.e. people that make money off other peoples sweat, a large percentage of the income is not counted as income and taxed until the investment is sold when it is taxed at the much lower capital gains rate. So they effectively compound their earnings tax free.

    Those of us who earn money from our own sweat don’t have that option.

  5. Wow! I had heard about people that think like that.

    “Don’t confuse me with facts, my mind is made up.”

    But I didn’t believe it.

    Now I have to.

    I’ll not bother you anymore.

  6. Wow, all of our nasty remarks about Ephraim’s evident extreme stupidity, and it is your measured and intelligent response to him that fiinally makes him go away. (Although I doubt he’ll really go away.)

    It’s so hard to accept that people like this really exist out there. Ephraim seems like he MUST be a parody. But I guess the eight years of the Bush presidency prove that people who can’t think for the buzzing in their heads are out there in droves.

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