Tip: Mid May. If the government had raised taxes enough to cover federal borrowing, we would have had to work until May 8 just to cover the tax bill.
Source: Tax Foundation, 2015
Taxes are one of the biggest budget items for most taxpayers, yet many have no idea what they’re getting for their money.
In 2015, as in recent years, Americans will spend more on taxes than on groceries, clothing, and shelter combined. In fact, we worked until late April just to earn enough money to pay our taxes. So what do all those weeks of work get us?1
Fast Fact: In the Hole. In fiscal 2015, the federal government is expected to spend $468 billion more than it collects in revenue. The government borrows the funds it needs to cover this shortfall by selling Treasury securities and savings bonds.
Source: NPR, January 26, 2015
The accompanying chart breaks down the $3.5 trillion in federal spending for 2014 into major categories. By far, the biggest category is Social Security and income programs, which consume one-third of the budget. This includes Social Security, retirement and disability programs for federal employees, food assistance, and unemployment compensation. Another 18% of the budget goes to defense and related items, and 24% goes to Medicare and health programs.2
Are taxes one of your biggest budget items? Take steps to make sure you’re managing your overall tax bill. Please consult a tax professional for specific information regarding your individual situation.
Pieces of the Federal Pie
Roughly 66% of 2014 federal spending was used for Social Security, Medicare, defense, and related programs.
Source: Center on Budget and Policy Priorities, 2015
- Tax Foundation, 2015
- Center on Budget and Policy Priorities, 2015
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