Where Do Your Tax Dollars Go? A Long Story in 5 Quick Graphs

Tax Day 2011 is Monday, April 18. But where does all our money go? What are all those IRS checks for?

Here are five ways to look at our tax receipt and the way our tax dollars are used to define our national values. In the gallery below, I've also included a handful of images that dive deeply into the question, How Much Money Do We Fork Over? and How Is the Money Spent?

1. The Tax Receipt

The receipt speaks for itself. Social Security, Medicare, Medicaid, interest and Middle East wars accounts for the vast majority of our budget. The upshot: Cutting foreign aid and making senators take a pay cut snips insignificantly from the total receipt.

2. The Policy Breakdown

This useful and straightforward chart comes from the Center on Budget and Policy Priorities. Note that under the category of "benefits," we can list Social Security (20%), Medicaid/Medicare/CHIP (21%), Safety Net Programs (14%) and Benefits for Federal Retirees and Veterans (7%). That amounts to 62% of the budget dedicated to preserving quality of life for old, disabled and sick people.

3. The Big Picture

As Ezra Klein wrote, "two of every five dollars goes to Social Security, Medicare or Medicaid, all of which provide some form of insurance. A bit more than a buck goes to the military. Then there's a $1.50 or so for assorted other programs -- education, infrastructure, environmental protection, farm subsidies, etc. Some of that, like unemployment checks and food stamps, is also best understood insurance spending. And then there's another 40 cents of debt repayment." The business of the U.S. government, he concludes, is insurance ... and military.

4. The Bigger Picture

To continue where I started here, 50 years ago, defense spending made up 40 percent of government. We spent five times our current share on infrastructure, and twice as much on research and development. For every dollar we spent on health care, we spent two dollars on education. America was a younger country then, and younger countries invest in their future. We've become an old, rich country, and we've done what old rich households do: Focus on preserving our wealth and health. More and more of our money goes to preserving wealth rather than investing in it.

5. The Future Picture

In March 2010, the CBO projected that in 10 years, Medicare, Medicaid, Social Security and net interest on the debt (health payments, retirement payments, and debt payments), would take up six out of every ten dollars the federal government spends.

About the Author

Derek Thompson is a senior editor at The Atlantic, where he writes about economics, labor markets, and the media. He is the author of the book Hit Makers.

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