BUSINESS + ECONOMY
Breaking down the numbers: where are all of our tax dollars going?
Apr 18, 2023, 5:00 PM
(Photo by Robert Alexander/Getty Images)
SALT LAKE CITY — After paying your tax dollars, if you were to receive a receipt detailing what you just bought, what would it say? Romina Boccia, director of budget and entitlement policy at the Cato Institute joined Inside Sources with answers.
“It’s quite remarkable,” said Boccia, “about two-thirds of every tax dollar went to so-called ‘transfer programs.”
As Boccia explains, essentially, the government hands money to from one group to another without buying anything considered a core-governmental service.
Further, $0.46 of every dollar went to healthcare programs and social security according to Boccia. While $0.12 percent of every dollar went to national defense.
“One category that people are particularly upset about is interest on the debt,” said Boccia. Or as she likes to call it, “the sins of our past”. Contextually, that category consumes $0.08 of every dollar.
Although that amount of tax dollars go to paying off the government’s interest on their debt, Americans only pay 78% percent of what the government owes. The other 22% has been borrowed says Boccia.
More statistically, $0.22 of every dollar spent by the federal government was borrowed money. The debt is already larger than the entire economy of the U.S. this year. Meaning if the U.S. were to pay off its debt, it would need every penny that every American earned in this year.
To put things in perspective, Boyd Matheson says to imagine spending 22% more of what you made this year. Consider the damage it would do to your debt and the interest you’re already paying.
“It’s a very skewed picture of what people pay and what people receive,” said Boccia, “it’s not transparent at all.”
Call to action
Additionally, Boccia said because people certain taxpayers don’t feel the pain, they have no need to demand better policy or pay attention in general.
The first call to action, according to Boccia is to set a budget. Congress should start by freezing debt. Make sure the economy grows at least as fast as the debt. Which would require eight trillion dollars in spending cuts over the next 10 years. Although it’s a large number, it’s only 10% of the projected spending according to Boccia.
Similarly, Matheson feels if the American home can slow spending, the highest levels of government can too.
Listen to the full segment with Romina Boccia on Inside Sources.
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