March 22, 2018
Tax Day shows how your individual income taxes were spent. Those are a portion of the taxes withheld from your paycheck, and due this year on April 17, 2018.
Tax Day materials do not include corporate taxes or the individual payroll taxes that directly fund Social Security and Medicare. To read more about where federal revenues come from, visit Where the Money Comes From.
Our Tax Day materials show how federal funds were spent during fiscal year 2017, the time period that most closely corresponds to the calendar year for which income taxes are due.
In order to do this analysis, we separate federal funds from trust funds. Trust funds, generated from sources such as payroll taxes, can only be used for specific programs like Social Security and Medicare. All other funds are federal funds, including revenue from your federal income taxes, and can be used for a wide variety of purposes.
We use analyzed federal fund “outlays” for FY 2017 from the FY 2019 Budget as reported by the White House Office of Management and Budget’s (OMB) and available from the Government Printing Office. These are the most recent available data for legally enacted federal spending at the time of publishing.
When OMB publishes federal budget data, it uses several categories of spending called functions, and within those, subfunctions.
NPP uses 13 different budget categories to sort federal spending. These do not correspond exactly to the official government functions. Rather, they are meant to organize the many government subfunctions into more intuitive groupings. In order to create our Tax Day materials, federal fund outlays were sorted into the following categories:
Elementary, secondary, higher and vocational education.
Subfunctions: 501, 502, 503
Example programs:
Natural resources and environment, conservation, and supply and use of energy.
Subfunctions: 271, 272, 274, 276, 301, 302, 303, 304, 306
Example programs:
Agriculture as well as nutritional assistance programs.
Subfunctions: 351, 352, 605
Example programs:
Law enforcement and the justice system, commerce, overhead costs of the federal government, and undistributed offsetting receipts.
Subfunctions: 372, 373, 376, 751, 752, 753, 754, 801, 802, 803, 804, 805, 806, 808, 809, 922, 929, 951, 952, 953, 954, 959
Example programs:
Housing assistance and credit, community development, disaster relief, and services supporting social needs.
Subfunctions: 371, 451, 452, 453, 506, 604, 925
Example programs:
Annual interest paid on the national debt, net of interest income received by assets the federal government owns.
Subfunctions: 901, 902, 903, 908, 909
Diplomatic, development, and humanitarian activities abroad.
Subfunctions: 151, 153, 154, 155
Example programs:
Health care programs and services, and occupational and consumer health & safety.
Subfunctions: 551, 552, 554, 571, 921, 926
Example programs:
National defense, nuclear weapons activities, war costs, and international security assistance.
Subfunctions: 051, 053, 054, 152
Example programs:
General science research and space flight research and activities.
Subfunctions: 251, 252
Example programs:
Income security programs, federal employee retirement and disability, and job training.
Subfunctions 504, 505, 601, 602, 603, 609, 651, 923
Example programs:
Development and support of air, water, ground, and other transportation.
Subfunctions: 401, 402, 403, 407
Example programs:
Health care, housing, education and income security for veterans.
Subfunctions: 701, 702, 703, 704, 705
Example programs:
NPP’s personalized and state average tax receipts shows how much of your federal income taxes went to each of the 13 categories specified above, using federal fund outlays data from the OMB Public Budget Database, as described.
In addition, the receipt shows how much of your taxes went to particular programs within each of those categories, using data from OMB’s Public Budget Database, as follows:
Includes outlays under Education subfunctions for the Bureau, “Office of Federal Student Aid.”
Includes outlays under Education subfunctions for the Bureau, “Office of Elementary and Secondary Education.”
Includes outlays under Energy & Environment subfunctions for the Bureau, “Environmental Protection Agency.”
Includes outlays under Energy & Environment subfunctions for the Bureau, “National Park Service.”
Includes outlays under Food & Agriculture subfunctions for the Account, “Supplemental Nutrition Assistance Program.”
Includes under Food & Agriculture subfunctions for the Account, “Child Nutrition Programs.” Includes school lunch, school breakfast, summer meal programs, and more.
Includes outlays under Government subfunctions for the Bureau, "Internal Revenue Service."
Includes outlays under Government subfunctions for the Bureaus, “U.S. Customs and Border Protection" and "U.S. Immigration and Customs Enforcement."
Includes outlays under Government subfunctions for the Bureau, “Federal Prison System.”
Includes outlays under Health Care subfunctions for the Account, “Grants to States for Medicaid.”
Includes outlays under Health Care subfunction 571, “Medicare.”
Includes outlays under Health Care subfunctions for the Account, “Children’s Health Insurance Fund.”
Includes outlays under Health subfunctions for the Bureau, "National Institutes of Health."
Includes outlays under Housing & Community subfunction 604, “Housing assistance.”
Includes outlays under Housing & Community subfunction 453, “Disaster relief and insurance.”
Includes outlays under International Affairs subfunctions for the Agency, “Department of State.”
Includes outlays under International Affairs subfunctions for the Agency, “International Assistance Programs.”
Includes outlays under Military subfunctions for the Bureau, “Military Personnel.”
Includes obligations reported for FY 2017 for all Department of Defense prime contracts, from USASpending.gov as of March 16, 2018.
Includes obligations reported for FY 2017 for Department of Defense prime contracts by recipient for Lockheed Martin, from USASpending.gov as of March 16, 2018.
Includes outlays for subfunction 053, “Atomic Energy Defense Activities.”
Includes outlays under Science subfunctions for the Agency, “National Aeronautics and Space Administration.”
Includes outlays under Science subfunctions for the Agency, “National Science Foundation.”
Includes outlays under Transportation subfunctions for the Bureau, "United States Coast Guard."
Includes outlays under Transportation subfunctions for the Bureau, “Transportation Security Administration.”
Includes outlays under subfunctions for Unemployment & Labor for the Account, "Payment Where Income Credit Exceeds Liability." This represents the refundable portion of the EITC, under which families can receive a tax refund greater than the amount of taxes paid.
Includes outlays under Unemployment & Labor subfunctions for the Account, “Temporary Assistance for Needy Families.”
Includes outlays under Unemployment & Labor subfunctions for the Account, "Low Income Home Energy Assistance."
Includes outlays under Veterans Benefits subfunctions for the Bureau, “Veterans Health Administration.”
Includes outlays under Veterans Benefits subfunctions for the Bureau, "Benefits Programs," and the subfunction, "Income security for veterans."
To generate average taxes paid for the U.S. and for each state, we used tax return data from the IRS. Our receipts are generated using information for tax year 2015, the latest available, state-level information at the time of publication.
The averages are calculated by dividing income tax amount by the total number of applicable returns. The income tax amount represents total income taxes owed after deductions and credits but does not reflect refundable tax credits, such as the refundable portion of the EITC.
State tax averages were then adjusted for inflation from calendar year 2015 to 2017 dollars.
