What Do Your Taxes Pay For?

What Do Your Taxes Pay For?

Taxes are one of the biggest budget items for most taxpayers, yet many have no idea what they’re getting for their money.

In 2012, as in recent years, Americans spent more on taxes than on groceries, clothing, and shelter combined. In fact, we worked until mid-April just to earn enough money to pay our taxes. So what do all those weeks of work get us?¹

Fast Fact: In the Hole. In fiscal 2012, the federal government spent $1.1 trillion more than it collected in revenue. The government borrows the funds it needs to cover this shortfall by selling Treasury securities and savings bonds.
Source: Congressional Budget Office, 2012

The accompanying chart breaks down the $3.7 trillion federal budget for 2012 into major categories. By far, the biggest category is Social Security and income programs, which consume one-third of the budget. This includes Social Security, retirement and disability programs for federal employees, food assistance, and unemployment compensation. Another 21% of the budget goes to defense and related items, and 23% goes to Medicare and health programs.²

Are taxes one of your biggest budget items? Take steps to make sure you’re managing your overall tax bill. Please consult a tax professional for specific information regarding your individual situation.

Pieces of the Federal Pie

Roughly 67% of the 2012 Federal budget was used for Social Security, Medicare, defense, and related programs.

**See attached Chart** (Source: Congressional Budget Office, 2013)

Itemized Federal Spending

Here’s a breakdown of how the Federal budget was spent, according to categories established by the Congressional Budget Office.

Social Security: 20%
Defense and International Security Assistance: 20%
Medicare, Medicaid and CHIP: 21%
Safety Net Programs: 13%
Interest on Debt: 6%
Remaining Program Areas: 20%

   Source: Center on Budget and Policy Priorities, 2012
     1. Tax Foundation, 2012
     2. Congressional Budget Office, 2013

--

Bradley Bofford currently resides in Mahwah with his wife, Lauren, and their two daughters.  Bradley can be contacted at BHBofford@FinancialPrinciples.com or at 973-582-1002. 

Securities offered through Securities America, Inc., member FINRA/SIPC, Bradley H. Bofford, CLU, ChFC, CFP® Registered Representative and Advisory services offered through Securities America Advisors, Inc., Bradley H. Bofford, CLU, ChFC, CFP®, Investment Advisor Representative. Financial Principles, LLC and the Securities America companies are not affiliated. The above information is based upon sources believed to be reliable, however it cannot be guaranteed. It is not considered an official statement of your account with Securities America, Inc. (SAI), nor has the performance data been audited by SAI or the individual product sponsor(s) as to its accuracy. In this regard, please refer to the confirmation notices and statements that you receive from SAI and/or the individual product sponsor. All investments contain risk and there is no guarantee that any goal or objective will be achieved. An investor should carefully consider the investment objectives, risks, charges and expenses before investing. The fund prospectus contains this and other information about the investment company. Contact your representative for a copy of the prospectus, which should be read carefully before investing.

The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. Copyright 2013 FMG Suite.