The Taxpayer Receipt

The other day my son directed my attention to a “Taxpayers Receipt” a document generated by a “progressive” (that’s new-speak for liberal) think tank known as Thirdway.  You can find this at: http://www.npr.org/templates/story/story.php?storyId=130249425    Thirdway has developed a taxpayer “receipt”, showing exactly what taxpayers are buying with the taxes they pay.

Thirdway indicates that “A 2005 Washington Post/Kaiser Foundation poll found that by a margin of two to one, Americans believe the federal government spent more on foreign aid than on either Social Security or Medicare. This is among many surveys that show that voters know little about where their money is spent.”

Thirdway’s analysis is useful in that it gives Americans an idea of what their taxes are “buying” and gives insight as to how we might cut government spending.  Using IRS data, Thirdway indicates that “In 2008 the median tax filer in America had an adjusted gross income of $34,140 and paid $2,790 in federal income taxes.  Assuming that all of that income was earned through wages, this filer would also contribute $2,610 to Social Security and Medicare through FICA. That is a total of $5,400 in federal tax and FICA payments.”  Thirdway’s Tax Receipt is listed below:

2009 Tax Receipt for Taxpayer Earning $34,140
Paying $5,400 in Federal Income Taxes and FICA

Social Security                                                       $ 1,040.70
Medicare                                                                $    625.51
Medicaid                                                                $    385.28
Interest on National Debt                                      $    287.03
Combat Operations in Iraq & Afghanistan             $    229.17
Military Personnel                                                  $    192.79
Veteran’s Benefits                                                  $      74.65
National Parks                                                       $      69.36
Federal Highways                                                  $      63.89
Health Care research (NIH)                                    $      46.54
Foreign Aid                                                            $      46.08
Education Funding for Low income K-12               $      38.17
Military Retirement Benefits                                   $      32.60
Pell Grants for Low Income College Students         $      29.75
NASA Space Program                                              $      28.09
Internal Revenue Service                                         $      17.69
Environmental Clean Up (EPA)                                 $      11.67
The FBI                                                                    $      11.21
Head Start                                                               $      10.91
Public Housing                                                       $      10.50
Drug Enforcement Agency                                      $        3.14
Amtrak                                                                   $        2.23
Smithsonian Museum                                             $        1.12
Funding for the Arts                                               $        0.24
Salaries and Benefits for Members of Congress      $        0.19

Thirdway’s analysis is useful in that it gives Americans an idea of what their taxes are “buying”.  However, it also gives insight as to how we might cut government spending.  I’m fairly certain that the liberals at Thirdway are taking the normal stance on Federal spending; that the entitlement spending for Social Security, Medicare and Medicaid makes cutting Federal spending almost impossible.

My take on this “taxpayer receipt” is that nearly 40% of Federal expenditures are in Social Security, Medicaid and Medicare.  These and other entitlements are political suicide for any politician even suggesting that they be cut, but economic reality is rapidly closing in on realization that painful cuts will have to be made, even in these previously sacrosanct programs.

As we head into the extremely important fall election it might be worthwhile to realize that we as a people are collectively soft and stupid.  We have promised ourselves government entitlements that have predictably turned into ponzi schemes, hoped for public pensions that can’t be funded, and have asked government to regulate every wrong, while catering to all of our financial and personal expectations.  A nation that once allowed its citizens to create collective prosperity with each person pursuing his or her own self interest now wants government to be the agent of innovation and prosperity.

The lessons of history are clear.  Private citizens spend their own money much more economically and judiciously than government spends their money for them.  Collective thought and action by government leads to serfdom and poverty.  Ask the Russians about that one.  We’ve gotten ourselves into a heck of a mess.  Spending cuts, even where social security, medicaid and medicare are concerned, will be required.  It is time to smell the coffee.  It’s also time to vote out any congressman who voted for TARP, Cap and Trade, and Obamacare.

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