Tuesday, April 19, 2011

Where is your Tax Money headed?.....




The Tax Man hit us all yesterday, well those of us who pay Federal taxes after deductions and the likes, and it is reported that Washington will spend $32,137 per household as shown in the attached article....

.

Of that $32,137....

.

Social Security\Medicare $10,458

National Defense $6,645

Anti-poverty programs $5,374

Interest on Federal debt.. $1,739

Veteran's benefits $1,190

Unemployment benefits $1,135

Education $698

Health Research\regulation $552

Highways\transportation $522

Justice administration $510

Numerous other federal programs $3,494





.

7 comments:

Larry G said...

The referenced article was honest enough to also say this:

" Washington will spend this $32,137 per household as follows (all numbers adjusted for inflation): Social Security/Medicare: $10,458. The 15.3 percent payroll tax, split evenly between the employer and employee, covers most of Social Security's and some of Medicare's costs."

The FICA Tax is NOT the Income Tax and there is no way to evade paying the FICA Tax. No deductions. No exemptions. No itemized write-offs.

Everyone pays it on every dollar earned (up until $106,00 for SS).

And this is a very big reason why SS and Medicare Part A for more than 60 years has, most of the time, produced a SURPLUS and NOT a deficit - UNLIKE the income tax-funded part of the budget.

Yes - in the future FICA and SS will need changes - the same way that FICA has been changed several times over the years to maintain adequate funding of SS payouts.

SS has EASY, well understood, many supported by a majority of Americans - fixes.

If you remove SS from that list (because it is NOT in deficit and IS funded from FICA not Income Tax), then you see the real truth of the Federal Budget.

Defense is a 1/3 of the Deficit. Anti-poverty programs are another 1/3.

No matter what happens to SS - neither of these two will change unless we cut them back or increase revenues to pay for them.

RightsideVA said...

Good points and glad you went to the article to get all of the data. I don't like to copy & paste whole articles for that would make no sense to go to blogs except to be nothing like a page with a bunch of links...
Unfortunately one of the local bloggers has made it a free lance "career" of copying everything out there with no reason not to just go to the original site and read it for yourself.....

Yes Payroll tax is not one you can afford and is straight across the board for all of those who work and make an income. But what about those working under the table? Those who refuse to take a over the table job with a reported income that is not more than what they get in unemployment benefits and work the side under the table jobs?

The original article includes SS with Medicare and not sure why they did that as you point out in your comments...

No matter what we need to do something before this ship goes over the falls.....

Larry G said...

Every heard of a 1099? or how about this - go to the 1040 - line 27 under Adjustments to income.

If you earned income not reported on a W2 - by law the employer must report it via a 1099 and you must report it on your taxes and you must pay your share of the FICA on line 27.

And if you or the employer does not, you are, in fact, considered to be practicing tax evasion.

Most every business is required to have a business license and when that business gets that license - they are also reported to the IRS and given an IRS number.

Check around out there in the Valley. Ask around for the contractors and handyman services... you'll find that in a majority of cases - it's very very difficult to operate any kind of a viable, visible business without getting a visit from the local county and subsequently a letter from the IRS.

The original article does what a lot of the Media does now days when talking about the Federal Budget - they conflate the two very different revenue flows.

FICA pulls in more than a trillion a year and pays it all out except for a small surplus (most years).

In other words, THAT program HAS WORKED without paying out more than it took in - UNLIKE the income-tax side of the Federal Budget.

SS and Medicare Part A have to change because demographics are changing but they are no more in trouble than any business that sells actuarial products - like insurance and annuities - that also have to change as demographics evolve.

Health and Life insurance, annuities, and pensions including public sector pensions have to change when the demographics change.

and they do.. and in doing so -they stay solvent.

One of the other big misunderstandings not explained in the media nor by politicos is that Medicare Part A is funded from FICA - a separate box on your paycheck while Medicare Part B is not.

Medicare Part B is 25% funded from premiums and 75% funded from income tax revenues and Medicare Part B and MedicAid are healthcare that has been doubling in costs every decade and it is those two as well as TRICARE and private insurance that all are seeing every increasing costs and eating our Federal budget alive.

I consider myself a socially progressive fiscal conservative who would like to see us get past the partisan sound bites and to deal with the realities.

Right now there are so many misconceptions that there really is no way to get together to agree on what to do - because - we not even agree on what the problems are.

RightsideVA said...

Spending?....

Larry G said...

there's not agreement on that.

Even David Stockman, Reagans supply-side budget director says that revenues have to be part of it as do both deficit commissions.

But I'll say this:

If you are a person who says that we can get rid of the deficit by cutting...

then show me 1.5 trillion worth of cuts.

I've yet to see a single person who says that we get there by cuts alone - show a list of 1.5 trillion worth of cuts.

why?

RightsideVA said...

You will NOT get there by budget cuts only but too much tax increase is not productive as well...

I would favor something like in the past where there is a $2-3 spending cut for every $1 increase in tax revenue...

There is plenty to cut but not enough to solve the entire problem...

What is the mix?

Larry G said...

obviously from a fiscal conservative view - you'd come up with the cuts FIRST and then what you could not cover with cuts, you cover with taxes.

But I've not seen ANY list of cuts from those who say do the cuts that comes to more than a couple hundred billion ....total.

Do you have a list of a trillion or more cuts?

see the other funny part about this is that the folks who say we can get there with cuts won't show the cuts but they say it's the job of those who don't think we can get there with cuts along - to show the cuts.

Our taxes are the lowest they've been in 50 years so I just think we've gone way too low and there is no way to cut near enough to get balance.


but I'm willing to listen to those who say cut.. I just want to see what they'd cut.