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Consumer

Good Question: Where Do Your Federal Tax Dollars Go?

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(credit: CBS) Jason DeRusha
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By Jason DeRusha, WCCO-TV

MINNEAPOLIS (WCCO) – On tax day, we’re reminded of all the money we spend on state and local taxes every year, but we don’t get a receipt. So what does our tax money buy?

“I hope it’s going for social justice causes to help people who are less fortunate and things like fixing bridges, infrastructure,” said Amber Carter, a Minneapolis author and business-owner.

However, only of a sliver of Carter’s total federal income tax bill is going toward infrastructure.

“It’s just so hard to relate to billions and trillions of dollars,” said Andrew Johnson, a Minneapolis computer programmer who co-created WhatWePayFor.com with his friend Louis Garcia.

If you plug in your income, you can find out line-by-line what your tax money buys.

Since the site launched a couple months ago, “visitors were shocked at how unequal these things were,” Garcia said.

The White House has launched a similar idea, a website that gives a tax receipt.

According to that site, when you take your income tax only, national defense is the top category, taking up about 26 cents of every dollar.

“That’s a lot of money for something I don’t love,” Carter said.

Health Care is the second category, mostly Medicare and Medicaid expenses, making up 24 cents per dollar.

Then aid programs to help the poor, unemployed, and hungry, which the White House site calls “job and family security.” That category takes about 22 cents of your federal income tax dollar.

“There are these huge expenditures,” Johnson said. “If you want to get serious about reducing spending in this country, you’re going to have to talk about it. Everything else — transportation, foreign aid — comes out to 12 percent. Even roads and infrastructure.”

Many think foreign aid is a major expense for the federal government. However, you only spend 1.7 cents per income tax dollar on it. Controlling air pollution and environmental problems is just 1 cent.

“I’m a little shocked by that,” Carter said.

“For a steak dinner for two… we spent more than we did on NASA for the entire year,” Garcia said.

“It’s empowering to know this is where the money goes,” Carter added.

The idea, according to the two programmers, is to share the real data, and then hope voters and politicians focus on the big issues, rather than the little things that get so much attention.

“When they really understand where there money is going, they’ll step up and say something to the government about it,” Johnson said.

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