Conflict & Justice

Tax day surprise: What happens to all your money?


A protestor during a tax day demonstration on April 17, 2012 in New York City. Protesters demonstrated against loopholes allowing corporations to pay lower income taxes than most individuals. So where does all that money go anyway?


Justin Sullivan

The eye-popping numbers. The thicket of documents. The arcane instructions (Line 73 on form 1099-C, anyone?). And worst of all, the fat check you send — under threat of incarceration.

Charming tradition, eh?

If taxes are the price we pay for a civilized society, the whole rigmarole can make anarchy an appealing option. (Was it Oliver Wendell Holmes who said that?)

Of the many things that frustrate people about taxes, among the worst is that the money just seems to ... disappear. Sure, highways get built and wars get fought, but the bill for each of us is huge. No one in Washington sends an itemized receipt, let along a thank you letter.

Think of it like this: A typical American worker may dedicate one day a week or more to earning money that goes straight to Uncle Sam. Over a forty year career, that's eight years spent working for the man.

Any clue how it's spent? Care to guess how many dollars go to F-16s versus environmental regulators?

The White House is attempting to shed some light on this murky matter. On its website it has posted a calculator that lets you know "where and how your taxes dollars are being spent."

Enter the taxes you paid, and the calculator tells you, for example, how much went to national defense, unemployment assistance and NASA. Or choose one of the pre-set income scenarios. The results are surprising.

As an example, take the calculator's pre-set scenario of a family of four with an income of $80,000. The family pays $9,110 in taxes, which funds the following:

- Social Security: $3,360
- Medicare: $1,160
- National defense: $1,142.91
- Children's health insurance: $459.00
- Food and nutrition assistance: $169.83
- International affairs: $73.44
- Environmental protection: $32.13
- Student financial aid for college: $1.84

Perhaps the most surprising number of all is the "net interest" on the national debt, which weighs in at $339.66, or 8.1 percent of income taxes. That's a lot of money, and it stands to grow fast if budget deficits remain high or if interest rates rise. But for now, it hardly seems insurmountable.  

Feeling better now that you know what happens to that slice of your productive life? If you really want to get depressed, there's a massive red button at the bottom of the page that proports to reveal how many millionaires pay less than you do. 

Sorry #OWS, it doesn't tell you their names.