Apr 17, 2012
Taxes and You!
I figured today was as good a day as any to remind us of how our taxes, our federal budget, is spent:
Each percentage represents approximately $33 Billion for an annual budget of $3.3 Trillion. 58% of the budget results in direct payments to individuals.
20.5% Social Security
9.0% Help for low-incomers
5.9% Net Interest on Debt
25.0% Everything Else
Every thing else includes transportation (3.3%), education (1.9%), federal and military retirement (3.8%), homeland security (1.3%), science/space (0.9%), international aid (1.7%), and environmental (0.6%).
Help for low-incomers includes food stamps, housing, welfare, and school lunch programs.
As we listen to politicians and pundits position themselves on how we can cut spending and raise taxes, and I look at the numbers above, it is clear that they are full of hot air.
We must increase spending in areas such as transportation, education, science, space, and the environment. We are going to need to come up with some innovative programs, focused on the future, not the now. If we increase spending here, then we will be able to reduce some of the low-incomer expenses, a net wash for the budget.
I think we need means testing for social security and medicare, we need to cut defense spending, we certainly cannot afford to extend the tax cuts, and we must increase taxes on the 1%. With a current deficit on the order of $1 Trillion per year, that means that the combination of spending cuts and tax increases need to combine for a total of 30%. This is why there are no simple solutions and the sound bites are distracting and meaningless. This is going to require rolling up our shirt sleeves and making some tough and fair decisions.