What are Our Income Taxes Used For?

Tax Act

No one likes to pay taxes. In fact, you may even wonder where your hard earned money goes. It’s especially upsetting to hear that government money was used to fund some insane research, like whether or not mice like cheese. Regardless, you have to pay them. Still, it helps to know where that money goes. This April, maybe you’ll be a bit more at ease knowing that your tax dollars are actually be used for some pretty amazing things.

How Are Federal Income Taxes Used?

It may surprise you, because our military gets paid so little, but over 50% of our federal tax dollars in 2009 went towards our current military members, veterans and the current wars that we’re fighting. This includes the costs of weapons, housing, etc. The rest of our tax dollars are spent on human resources (education, medical), general government (government officials’ salaries) and physical resources (agriculture). The government includes Social Security in their figures. However, many point out that Social Security is collected separately from federal income taxes and is thus a trust fund. When we think of what the government does individually with our income tax dollars, defense and wages for government employees eat up a large chunk of our income taxes, but it’s important to remember that our taxes cover the costs of thousands of expenses. While our government does spend money on unwise decisions, it also spends money on Pell grants for college students, food for needy families and other important expenses.

How Are State Income Taxes Used?

State income taxes may be used differently in different states. However, many states use state income taxes to pay for education, government officials’ salaries, police forces, EMTs, health and social services and even public transportation. What a state uses it’s money on will depend on what the state’s government determines needs the most help. However, not all states have state income taxes. States like Tennessee only charge federal income taxes, but have a much steeper sales tax than states that do have an income tax.

While paying federal and state income taxes may not be ideal, chances are these taxes have paid for something in your life. It may have been the schools you attended or the roads you drive on. Either way, income taxes are a necessary evil. After all, if we were given the chance to pay for these items, instead of being forced to, chances are many people wouldn’t shell out their own money willingly.

About the Author: Manuel Phyfe is a volunteer with an organization that helps senior citizens find free tax support. He finds that many are angry at tax time not because they have to file a return, but because they don’t understand where their money has gone.


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