Monday, April 18, 2011

Where Do Your Federal Taxes Go?

Due to a holiday in Washington, D.C. this past Friday, April 15, the deadline for filing federal income tax returns is midnight today, April 18. But where does your money go? The Whitehouse has a new website, Taxpayer Receipt, an information source President Obama promised the public in his State of the Union Address. According to the website:
In his State of the Union Address, President Obama promised that this year, for the first time ever, American taxpayers would be able to go online and see exactly how their federal tax dollars are spent. Just enter a few pieces of information about your taxes, and the taxpayer receipt will give you a breakdown of how your tax dollars are spent on priorities like education, veterans benefits, or health care.
You are asked to enter your 2010 payments of social security, Medicare, and income taxes. You then click on the "calculate receipt" button to see the breakdown of the total you paid. Even without entering any information, however, you can see at least the percentage distribution of your income taxes. For instance, over 26% of one's income taxes is used in the broad category of national defense. Most of that 26% is spent on military salaries and benefits, operations and equipment, and research and development. Over 24% is spent on health care and over 7% of your income taxes goes to pay interest.

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