What Do Federal Income Taxes Pay For?

Distribution of Federal Taxes
Image Credit: Photodisc/Photodisc/Getty Images

According to the U.S. Center on Budget and Policy Priorities, the United States federal government collects $2.5 trillion in taxes each year. This money is primarily used to finance programs that help defend, educate, financially support, care for, transport, and/or perform other similar functions for individuals living within the United States.

Defense

According to the U.S. Center on Budget and Policy Priorities, the federal government spends over $700 billion a year on military and national security-related expenses, which accounts for approximately 20% of the federal budget.

Education

According to the U.S. Department of Education, the federal government spends over $68 billion a year to help schools and colleges, which accounts for approximately 2% of the federal budget.

Financial Assistance

The U.S. government spends over $700 billion a year on social security (20% of budget) and over $450 billion a year on welfare and financial aid programs (13% of budget.)

Health Care

The U.S. government spends approximately $700 billion a year (21% of budget) on government programs such as Medicare that provide health care coverage to the elderly, disabled individuals, and individuals that cannot afford care.

Transportation

The U.S. Department of Transportation receives approximately $68 billion (2 – 3% of budget) a year to establish and maintain airports, pipelines (oil, gas, etc.), roadways, railroads, waterways, and other similar forms of transportation.

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