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Posted on 04/14/2003 12:51:28 PM PDT by new cruelty
Income Tax--The EZ Guide
Benjamin Franklin famously said that “In this world nothing can be said to be certain, except death and taxes.” But for most of the history of the United States, individuals did not pay income taxes at all. Even after 1913, when Congress first imposed the modern income tax, individuals paid only between 1% and 7% of their personal income in taxes, compared with the present-day range of 10% to 38.6%. And for many years, individuals were allowed so many deductions that very few people paid any income tax at all.
What changed? First, the huge financial costs of fighting World War II (1939-1945) raised income tax rates considerably. Then even higher income taxes were required to pay for rising health care costs, the high price of Social Security benefits, increased defense spending, and the cost of a host of other government programs that many of us take for granted. The following articles provide background information on income taxes--it’s just possible that the more you know about where your income tax dollar goes, the less painful it will be to open your wallet each April.
Income tax--an overview of income tax in the United States and Canada, including profiles on the various types of income tax, its history, and explanations of how individuals compute and file their income tax. The article also discusses the most significant debates over income tax, including tax loopholes and shelters, capital gains tax, the so-called marriage tax, and other issues.
Public Finance--background on how governments raise money, how that money is spent, and the effects of these activities on the economy and society. Taxation--a comprehensive primer on all types of taxes, how government spends taxes, the underlying principles of taxes, their history, and their effects on the economy and society.
Commonly used tax terms--a glossary of tax terms you should know.
Where Does the Government Get Its Money?
Income taxes paid by individuals comprise the largest single source of money used to fund federal government programs. And individuals pay a larger share of these programs today than ever before. In 2002, individual income taxes accounted for approximately 49% of the total money the federal government raised to pay its bills, up from about 40% in 1950. By contrast, corporations pay less income tax than they used to; corporate income taxes accounted for just 10% of federal revenues in 2002, down from more than 26% in 1950.
U.S. federal revenues--this chart illustrates the percentage of total federal revenues paid by individual income taxes, corporate income taxes, social insurance receipts, and excise taxes.
U.S. federal receipts and outlays--this table lists the amounts of money collected by the federal government (“receipts”) from various sources, from 1940 to 2003. It also identifies the amounts spent on various government programs over the same period.
Fiscal Policy--a primer on the government’s economic policy related to taxation and government spending.
Where Does Your Tax Dollar Go?
The federal government spends most of its budget on just a few programs. In 2001, social security, defense, Medicare, Medicaid, and interest payments on the national debt accounted for three-quarters of all federal spending. The rest goes toward a wide variety of programs, such as education, transportation, health programs, veterans’ benefits and other areas.
About two-thirds of federal expenditures is considered mandatory spending; the government spends this money automatically unless the President and Congress change the laws that govern it. Mandatory spending goes toward such entitlement programs as social security and Medicare, and it also goes toward paying interest on the national debt. The rest of government spending is considered discretionary; each year the President and Congress must decide which programs this money will fund. Discretionary spending goes toward such diverse programs as defense, highway construction, the FBI, housing, foreign aid, space exploration, and other programs.
U.S. federal government spending--this chart illustrates federal government spending in 2001, broken down by major categories. Social security benefits account for the largest percentage of federal spending (22.6%), followed by spending on national defense (16.2%). How government spends taxes--this provides the skinny on where your tax dollar goes, on the federal, state, and local levels.
Changes in U.S. federal spending--this chart tracks changes in the categories of spending by the federal government since 1940. Beginning in the 1970s, spending on human services such as social security and Medicare has grown to the point where it now dwarfs federal spending in other areas.
Social security programs in the U.S.--a listing of the various social security programs, matched with explanations of who pays, who administers, and who benefits from each. Every working American has a portion of his or her paycheck withheld to pay for these benefits, which account for the largest category of federal spending.
A little crunching reveals that while the fraction of the federal outlays spent on defense, interest on the debt and foreign affairs is about the same now as in 1940, the fraction for health care, not including Medicare, has gone up by about 10 times from 1940. The fraction spent on "other" which includes Ag subsidies, federal highways and lots of other stuff, has gone down by about a factor of 5. Where in the Constitution is the federal government given any power to provide for health care or retirement security, social security being the other category that has grown immensely. However to be "fair", at least SS and medicare are more than paid for by the taxes explicitly dedicated to them, although I doubt that will remain true for very much longer as the population, at least that portion paying SS tax or recieving benefits, ages.
Health and Human services .... die
Dept of Education ... good bye
FEMA ... that's a state job
DOT ... cut by half (interstates only) ... send to states
Dept of Agriculture ... state
EPA ... kill that one :)
Social Security Admin .... ponzi scheme .. kill it
NASA ... fold them into the Air Force ...
Dept of State .... fire everyone ... hire Moose, Rocko and friends to properly communicate American attitudes
Dept of Labor ... gut them
Housing and Urban Development ... public housing sucks
That's enough for now ..... now look at how much money we could put back in our pockets.
Source: RushLimbough.com
In 2001, social security, defense, Medicare, Medicaid, and interest payments on the national debt accounted for three-quarters of all federal spending.
Federal Budget Spending and the National Debt
The interest expense on the National Debt is the second largest expense in the federal budget. *Second only to income redistribution.
Last year (FY02) the U. S. Government spent $333 Billion of your money on interest payments* to the holders of the National Debt. Compare that to NASA at $14 Billion, Education at $32 Billion, and Department of Transportation at $51 Billion. And now this fiscal year (since 1 October 2002) we've already spent $147 Billion on interest payments!
Your money is spent through Appropriations Bills passed by Congress and signed by the President. This chart is based on the Appropriations Bills. The Government does not have any money, it takes your money from you and spends that! Press Release on Tax Code and the IRS.
According to Mr. Kneeland, "...all dollars come from the people. Where do [you] think Coca-Cola gets the money to pay its taxes, Exxon gets its money to pay the Exxon Valdez fines, Denny's gets the money to pay its Justice Department fines, or even Microsoft gets the money to defend itself? It all ultimately can come from only one place, and that's from individuals."
"For society as a whole, nothing comes as a 'right' to which we are 'entitled'. Even bare subsistence has to be produced.... The only way anyone can have a right to something that has to be produced is to force someone else to produce it... The more things are provided as rights, the less the recipients have to work and the more the providers have to carry the load." Thomas Sowell, quoted in Forbes and Reader's Digest.
"A politician cannot spend one dime on any spending project without first taking that dime from the person who earned it. So, when a politician votes for a spending bill he is saying that he believes the government should spend that particular dollar rather than the individual who worked for it." Neal Boortz.
"There is no such thing as government money - only taxpayer money." William Weld, quoted in Readers Digest.
"The Social Security Trust Fund is simply a meaningless record of taxes that have been collected for future needs, spent for current desires, and then recorded and counted as an asset, .... If we try to create assets for ourself at our local bank by simply recording numbers in our checkbook, I am sure they would not honor such action as a real asset. I suspect that the IRS would consider such action in creating a deduction on a tax return to be fraudulent as well." John Harker.
You forgot to list the Bureau of Alcohol Tobacco Firearms. This is a completely worthless federal organization dedicated to harassing peaceful firearm owners in America who don't comply with their "regulations."
The bottom line is, the total tax burden on the average American is much, much higher than it has ever been, with articles like this one presenting a false view of the big picture. If it were the case that the only taxes we paid were federal, then it might not be too bad. But anyone who actually thinks that the tax burden for the average American isn't out of hand is truly living in a fantasy world.
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