Taxes are an important part of society. Almost all Americans have to pay taxes, and they may be wondering about the truth of where their tax money goes. The truth about taxes is actually not to shocking or surprising- tax money goes to help Americans all across the United States, who most likely also pay taxes. Different aspects of society receive different amounts of tax funding. Here is the truth about where our tax money goes.
Tax Money Going to Healthcare
This is the largest allocation for tax money- simply because it is one of the most expense cost that Americanās face. In the United States there are three major branches of public funded healthcare:
- Medicare- This program provides healthcare for those Americans who that are sixty-five or older, or who have a severe disability. Income here is not a factor. Medicare is funded by federal taxes.
- Medicaid- This program helps households with very low income get access to healthcare. This is funded by both state and federal taxes.
*If a person is eligible for both Medicare and Medicaid they can get both forms of help.
- CHIP- This is short for Childrenās Health Insurance Program, as the name suggests, CHIP helps children of low income families get access to healthcare.
It may be hard to believe that these three branches of healthcare cost billions- but they do. This is simply because of how expensive healthcare is in the United States. As the costs associated with healthcare rise and wages stay stagnant, more and more Americanās find that they need to use these programs to get the help they need.
Tax Money Going to Social Security
This is the second largest allocation for taxes in the United States. Social Security pays for retirees, and disabled Americans. The monthly payments are made to cover any expenses that they, and any dependents may have. This is something that many Americans need once they stop working. Nowadays most Americans rarely solely rely on Social Security to fund their retirement.
Tax Money Going to Defense and Security
It is not a huge surprise that this is the third largest allocation of tax money. Defense and security are an important part of Americaās values and are reflected through the size and success of its military. These expenses can be broken down into two broad categories:
- Internal Security- This protects the people who live in the United States.
- External Security ā This protects American military personal overseas. It also funds any military expenses for different operations that may happen.
Tax Money Going to Safety Net Programs
This is the fourth largest expense for taxes. Safety net programs help those who are low income- or unexpectedly lose their income. Here are all of the programs that exist in the United States:
- Unemployment- temporary income to help those who lose their job unexpectedly.
- SSI- Additional Social Security benefits for those of low income households (who are disabled or over 65).
- SNAP Benefits- Debit funding for low income households to buy food.
- Housing Assistance- Public housing developments, and funding for those who have very low income.
- TANF- Cash to low income family in hopes of helping them to find fair jobs.
- Pell Grants- Educational grants for low income students who are pursuing college.
- Child Nutrition ā School programs that help low income children get breakfast, lunch and sometimes, dinner at school- for free.
- Job Training– Several employment programs for the general public- helps Americans connect with jobs.
- Child Care- Helps those with low income get access to child care- so they can work.
- WIC- Offers nutrition for pregnant women and children up to the age of five.
- Lifeline- Low cost phone programs,
- LIHEAP- Financial help for heating and cooling expenses.
Tax Money Paying For Everything Else
Although healthcare, social security, defense, and safety programs make a large part of the budget- there are other smaller expenses that taxes are used to fund:
Transportation
Taxes pay for the construction of roads, bridges, highways etc. They also cover any maintenance that is required every year.
Education
In the United States public schools from grades K through twelve get the majority of their funding from taxes (from property taxes to be precise). Taxes help do everything from paying teachers to paying for the administration.
Veteran Benefits
Some portion of taxes go to support those who fought for the United States. This support can range from additional income to publically funded support centers for veterans and their families.
The FDA
Also known as the Food and Drug Administration- the FDA handles the safety of all of the food and drugs that Americans consume. They test things out and then rule out its effectiveness and safety, they can also recall any products.
Governmentās Debt
Some amount of taxes are allocated towards paying off any debt the government has.
When a person pays taxes they may be curious about where their taxes are going. They way taxes are allocated- for the most part- are simple and make logical sense. As a tax payer it is important to know and understand where that money taken out each paycheck is going. Taxes, essentially help pay for the function of American society, and they help support all Americans- in one way or another.
