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It's tax day - here's what your federal taxes are actually paying for

Aug 21, 2024, 20:54 IST
Rick Wilking/ReutersIt's Tax Day. Do you know where your money is going?

Well, obviously, your tax return is filed with the Internal Revenue Service. After that, however, the money from your federal taxes goes towards a huge number of programs from healthcare to education to missiles.

The Center for a Responsible Federal Budget broke down exactly what federal taxes pay for in a post, breaking out federal government spending like a receipt for a $100 check.

The biggest chunk of your federal taxes goes to entitlements. Of the theoretical $100, $23.61 goes to Social Security and another $26.26 goes to healthcare programs. Of that $26.26, $15.26 is for Medicare, which helps provide health coverage for elderly Americans, and $9.55 goes to Medicaid, which helps cover low-income people.

The only other line item that cracks double digits is the $19.82 that goes towards defense spending and the next biggest expenditure is on paying down interest on the federal debt, $6.25 of the theoretical $100 bill.

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Here's the full breakdown from the Center for a Responsible Budget:

Center for a Responsible Budget

Obviously this is an incredibly simplistic breakdown (defense and education spending are incredibly broad categories) but it goes give a rough sense of what the check you send to the IRS is being spent on.

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