Where Your Taxes Will Go in 2017

Here is Brian Riedl writing at the Manhattan Institute about your taxes:

The 2017 federal income tax deadline is April 18. This provides an extra three days for taxpayers who are wondering what Washington is doing with all their hard-earned tax dollars.

This year, Washington will spend a near-record $31,154 per household and collect $26,761 per household in taxes. The resulting budget deficit of $4,393 per household will bring the total national debt to $160,000 per household – all dumped in the laps of our children.

Federal spending has surged more than $7,000 per household since 2000, and is projected to expand another $6,000 to $9,000 per household over the next decade (all numbers in this article are adjusted for inflation). Unless spending is reined in, similar tax increases must eventually result.

Washington will spend this year’s $31,154 per household as follows:

Social Security/Medicare: $12,141. The 15.3 percent payroll tax, split evenly between the employer and employee, covers most of Social Security’s and a small portion of Medicare’s costs. The typical couple retiring today will receive Social Security benefits 13 percent higher than their lifetime contributions, and Medicare benefits that are triple their lifetime contributions into the system, even after adjusting for inflation and net present values. This system can remain sustainable only if there are enough workers to support all retirees, which is why it risks collapsing under the weight of 77 million retiring baby boomers. Unless reformed, these costs will leap to an unsustainable $30,000 per household over the next few decades.

Anti-poverty programs: $6,143. More than half of this spending subsidizes state Medicaid programs that provide health services to poor families. Other low-income spending includes: Temporary Assistance for Needy Families (TANF), food stamps, housing subsidies, child care subsidies, Supplemental Security Income (SSI) and low-income tax credits. President George W. Bush increased anti-poverty spending from $3,500 to $4,500 per household, and President Obama expanded it past $6,000, mostly due to ObamaCare costs.

Read more: Manhattan Institute

Image credit: IRS Building / Wikipedia  photo by Joshua Doubek.