So this claim was making the rounds in a couple dumps here on Imgur and people wanted a breakdown explanation. Please note that the f...
So this claim was making the rounds in a couple dumps here on Imgur and people wanted a breakdown explanation. Please note that the figures I am going to be using here come from the 2015 budget, as provided here: https://www.nationalpriorities.org/budget-basics/federal-budget-101/spending/
I'm also using a 2020 tax calculator, located here: https://smartasset.com/taxes/income-taxes
Since the graphic is estimating on taxes for an income of $50,000 I did the same. Per the calculator, the Federal Income Tax for $50,000 is $8,167 -- which includes FICA, as we will be including money spent on Social Security, Medicare, etc.
First off, here is a graphic on our budget and where the government gets its money from. Note that the great majority comes from Tax Revenue. This includes individual and corporate income taxes (with a far greater portion coming from Us and a lot less coming from the corporations), as well as the taxes placed on things like Medicare, Social Security, and so on. Note that these things are listed as separate withholdings on your paystub, but they are taken out "pre-tax". This all combined together in the above calculator as the total Federal withholdings of $8,167.
Excise Tax is the additional tax the government places on things like Alcohol, Tobacco, Gasoline, etc.
Also note how part of the Federal governments "income" comes from "borrowing". We'll get back to that.
Initially the government divides it's budget or spending into 3 primary areas: Mandatory Spending (those things that MUST be paid for, no matter what), Interest on Federal Debt (all money is LOANED to the US government by the Federal Reserve Bank, at about 6% interest), and Discretionary Spending (the things we would Like to have with any additional money and credit available).
It roughly breaks down to about 65% Mandatory spending, 29% Discretionary spending, and 6% Interest.
If we were to break down Mandatory government spending, it would look like this. The majority there in blue is Social Security, Unemployment, and Labor expenses -- almost 50%, or $1.25 TRILLION. Remember that Mandatory spending was the majority of all government spending, and now this blue area is the majority of that. This is why things like Social Security and Unemployment benefits are always big targets for conservatives trying to get down government spending.
The second thing to note is that the next big chunk is Medicare and Healthcare, at 38% or $985 BILLION.
And here is Discretionary spending. Here we see that big Military spending people talk about, at about 53% or roughly $600 Billion. The next biggest wedge, "Government" is what we spend every year to keep the Federal government operating. This is not just the salaries of all our politicians, but all of the hardworking men and women in all federal offices, and federal agencies.
This here is an adjusted spending chart which combines all of those three primary areas (Mandatory, Discretionary, and Interest) into one single view so we can see where the majority of our money is being spent.
It works out to: 33.26% on Social Security/Unemployment/Labor, 27.42% Medicare/Healthcare, 15.88% Military, 5.97% Interest on federal debt, 4.19% on VA benefits, 3.54% on Food/Agriculture, 2.67% on Education, 2.22% on Transportation, 1.6% on Housing/Community, 1.31% on International Affairs, 1.17% on Energy/Environment, and a whopping 0.78% on Science.
Applied to our $50,000 annual salary, or $8,167 in Federal Income Tax, it works out roughly as follows:
$2,716 in Social Security, $2,239 on Medicare, $1,297 on the Military, $487 on the Interest (but not principle) of the federal governments debts, $342 on VA Benefits, $289 on Food and Agriculture, $218 on Education, $181 on Transportation, $130 on Housing & Community, $107 on International Affairs, $96 on Energy & Environment, and $64 on Science Research.
"Well none of this explains the original meme, about Corporate Bailouts, Tax Dodges, and "Loans" that never have to be paid back!" I hear you say. And you are 100% correct. The reason why is because these are DISCRETIONARY EXPENSES that were never BUDGETED for.
Think of it this way. Imagine the national income (via Federal Income Tax) was Your salary. Now imagine your employer was a real POS who kept threatening to move the company overseas and give your job to someone over there for pennies on the dollar. To keep him happy you have to now provide him with a Bribe. You can only give him so much money directly before it becomes suspicious, so you "allow" him to pay you less than you are actually owed on every paycheck. This is essentially what tax loopholes and tax dodges are -- hidden discretionary Expenses in the form of Bribes to keep businesses from moving all their jobs out of the country.
According to this site, which is using data from all the way back in 2014, American corporations are skirting about $90 Billion/year just via shifting profits to off-shore subsidiaries alone. https://americansfortaxfairness.org/tax-fairness-briefing-booklet/fact-sheet-offshore-corporate-tax-loopholes/
That practice alone, as an Expense, would land between what we pay for Education and what we pay for Transportation as an entire nation.
When you then also factor in the additional "loans" that corporations got -- with many giant corporations double-dipping into "small business" loans as well, by having their individual subsidiaries each file for small business loans, the total amount of money received by corporations via the CARES act was closer to $2 Billion.
Again, much of that was in the form of "loans", but I say "loans" in quotation marks because of vague writing in the act which exempts a corporation from having to pay back the loan so long as they use it on salaries and they refrain from layoffs or furloughing employees at any point between when they accepted the CARES Act loan, and September 30th. So what did they do? Companies like United Airlines laid off THOUSANDS of employees first, and Then they accepted Billions of dollars of federal loans that did not require reimbursement so long as a portion went to salaries and no more layoffs occurred. Or in other words, they completely violated the spirit or intent of the CARES Act while technically following the Letter of the act. Without any fallout of repercussions. https://viewfromthewing.com/united-airlines-uses-cares-act-loophole-to-reduce-employee-pay-keep-bailout-money-for-itself/
When we factor in this $2 Trillion that corporations received directly from the federal government (again, as a government Expense), that places Corporate Bribes as a greater expense than Social Security, Medicare, Military Spending, and Education all combined. It is, in fact, nearly the entire normal operating budget of the entire country.
Meanwhile the $550 Billion that most Individuals received from the CARES Act, when divided between 330 Million Americans, comes out to roughly $1,667 per person -- less than one single month of bills for most Americans.
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