Tax Read Time: 2 min

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.

The average household spends more on taxes than on groceries, clothing, or healthcare. In fact, 11% of our income, on average, goes to personal income taxes, which doesn’t include sales tax, property tax, Social Security payments, or Medicare payments. So what do we get in return?1

The accompanying chart breaks down the $6.27 trillion in federal spending for 2022 into major categories. One of the biggest categories is Social Security, which consumes almost one-fourth of the budget. Safety net programs, which includes food assistance and unemployment compensation, takes another 11%. Defense and related items take 18% of the budget, and 24% 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

More than 60% of 2022 federal spending was used for Social Security, Medicare, defense, and related programs.

Source: Treasury.gov, 2022

1. ValuePenguin.com, September 1, 2022
2. Treasury.gov, 2022

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. FMG Suite is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. 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. Copyright FMG Suite.

Share |
 

Related Content

Tips to Create a More Effective and Efficient Virtual Team

Tips to Create a More Effective and Efficient Virtual Team

March 2020 brought with it a tidal wave of unforeseen changes — to both our workforce and economy. Ready or not, a huge number of businesses had to pivot quickly to a 100% work-from-home model to keep their employees safe and their operations moving.

Mortgages in Retirement

Mortgages in Retirement

Explore the benefits and drawbacks to paying off your mortgage prior to retirement with this article.

Retirement Considerations in Your 60s

Retirement Considerations in Your 60s

Welcome to your 60s – the time in your life when retirement is less a far-off dream and more an immediate reality.