As of last week, your income taxes are all filed. Congrats! Or, like me, you got an extension. Boo!

In either case, it’s a good week to think about what our tax money bought this year. And since we’ve all been promised federal tax reform this spring or summer from a unified legislative and executive branch it’s also good to reflect on how the federal government spends our tax dollars now, and how it might spend them in the future.

A simple way to understand federal government spending is to compare it to a household. I don’t mean governments should be run like households – they shouldn’t – I just mean that we taxpayers can understand numbers that resemble the size of our expenditures in our own life. Otherwise you know, a billion here and a trillion there, it can get confusing.

The median household income in 2015, according to the US Census, was $55,775. With simplicity as my goal I prefer an easier, rounder number. So let’s just say instead of the median, we have $100,000 to spend each year as a household.

Looking at the federal government as a household with $100,000 in annual income, here’s where all the money goes, rounded to the nearest hundred dollars.

  • Our federal government household paid $33,300 for a combination of Social Security, unemployment payments, food assistance, housing assistance, welfare, and labor costs. All of these are considered “mandatory” in the sense that they are promised payments, and not voted on in a budgetary process each year by Congress.
  • We paid $27,400 on Medicare and other federal health-care costs. This is also “mandatory” and outside of the annual budgeting and decision-making process. The bill just comes in the mail and we pay it, no questions asked.
  • Our household paid $15,800 for military expenditures. This is considered “discretionary” spending, so Congress must approve an annual budget for setting this amount.
  • We spent $6,000 on debt interest, our household credit card. This is not discretionary if we ever want to be able to borrow again.
  • Lastly, everything else cost $17,500 in 2015, also part of the “discretionary” part of the budget approved by Congress. That includes everything from veteran’s benefits to transportation, and from energy and the environment to education and international affairs.
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