Breakdown of the Individual Income Tax Dollar: Income taxes are allocated to the federal funds budget; this is the budget that has been broken down for the chart on page 1 of Where Do Your Tax Dollars Go? The total federal government budget includes the federal funds and the trust funds budgets. Trust funds include Social Security, Unemployment Compensation, Railroad Retirement, and others. All numbers are derived from the tables of individual federal agency budgets as provided in the Office of Management and Budget (OMB), Budget of the U.S. Government, FY2009, Analytical Perspectives. The breakdown is for outlays (as opposed to budget authority) in fiscal year 2007, since this most closely corresponds to your tax filing. Total federal funds outlays in 2007 were $2,072,116,000,000. We have defined the categories on the bar chart as follows:
Median Income Family Taxes: The median income family's taxes were computed first by forecasting 2007 income levels by state from the 2003, 2004, 2005 and 2006 American Community Survey. Data for cities, towns and counties that were at least 65,000 in population are available in the American Community Survey. For those that were available, we calculated the city/town/county family median income as a percentage of the state level in 2006. We then applied that percentage to the state forecast for 2007 to come up with a 2007 level for the city, town or county. For smaller cities, towns and counties, we based the number on state and local data from the 2000 Census. Then, the tax estimate was computed by assuming standard deductions and exemptions for a married couple with one dependent, including one child credit. No other deductions or were assumed. However, this year we did take into account the economic stimulus payments of 2008. Additional data and statistics on income and taxes are available at:
Past and Current Military ($874.2 billion) includes the function area (referring to government categories) national defense ($578.5 billion), the sub-function area international military assistance ($8 billion), the Coast Guard ($8 billion), the Andean counterdrug programs and international narcotics control ($936 million), the function area of veterans benefits ($71.9 billion), and the military share of interest payments ($207.5 billion). The share is based on a historical analysis of national defense spending as a proportion of the federal funds budget.
Health ($458 billion) is the federal funds portion of all health spending by the federal government, including the federal funds spending on Medicare.
Interest on the Non-Military Debt ($212.3 billion) refers to the interest payments paid on the national debt. The military share of the interest payment is based on the average historical share of national defense spending. Since interest payments are on the debt which has been accumulated over time, the allocation of shares between military and non-military spending takes this into account.
Anti-Poverty Programs ($179.4 billion) includes federal funds outlays on the sub-function areas food and nutrition assistance ($54.5 billion) and other income security. Other income security includes Supplemental Security Income ($38.5 billion) which provides cash assistance to disabled, elderly and blind who have very low incomes; payments where Earned Income Tax Credit exceeds tax liability ($38.3 billion); Temporary Assistance for Needy Families ($16.9 billion); payments where child credit exceeds tax liability ($16.2 billion); foster care and adoption assistance ($6.6 billion); child care spending and a variety of other small programs for children and families.
Education, Training and Social Services ($90.6 billion) includes all federal funds outlays on the function area of the same name which includes the following subfunction areas: elementary, secondary, and vocational education, higher education, and research and general education aids, training and employment, other labor services, and social services.
Government and Law Enforcement ($80.7 billion) includes the following function areas: general government ($49.3 billion), administration of justice ($41.3 billion), the administration of the Social Security program ($19.3 billion), federal funds spending on unemployment compensation ($678 million), general retirement and disability insurance (excluding Social Security) ($1.9 billion), federal employee retirement and disability ($186 million), and undistributed offsetting receipts (-$82.2 billion).
Housing and Community Development ($69.2 billion) includes all federal funds outlays defined by the federal government as housing assistance ($39.7 billion), and the function area of community and regional development ($29.5 billion).
Environment, Energy and Science ($54.6 billion) includes all spending on the government-defined function areas of natural resources and the environment ($29.9 billion), energy (-$860 million), and general science, space and technology ($25.6 billion).
Agriculture, Commerce and Transportation ($31.7 billion) includes federal funds outlays on three function areas: agriculture ($16.7 billion ), commerce and housing credit ($590 million) and transportation ($21.6 billion).
International Affairs ($21.5 billion) includes the function area of international affairs except for international security assistance, Andean counterdrug programs and international narcotics control. The sub-function areas included international development and humanitarian assistance (minus the counterdrug and narcotics programs), conduct of foreign affairs, foreign information and exchange activities, and international financial programs.
