What Services Do Our Taxes Pay For?

With each tax payment you make, whether for federal income taxes or local property taxes, you should pause to consider the benefits associated with these various tax payments. Taxes, including federal, state and local taxes, fund myriad projects and initiatives to help benefit the collective group.


Federal Taxes

With roots dating back to 1861, the federal income tax helps finance a wide range of initiatives and programs. Federal taxes help pay for defense and security programs. This can include costs related to supporting war efforts and operating security programs at home and abroad. Your federal tax dollars also go to finance Social Security payments, various health insurance programs and programs meant to help citizens survive difficult times. These programs include Medicaid, Medicare and tax credit opportunities, such as the earned-income credit and child tax credit.


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State Taxes

State taxes come in several forms, mainly the income tax and state sales tax. Not all states collect income tax, and some may not charge a sales tax. States use the revenue created by tax collection to support education, state-funded health care programs and assistance for low-income individuals. Other recipients of state tax revenue include transportation projects, such as fixing roads and building new transportation systems. In addition, state tax revenues go to fund the jails and correction facilities within the state.


Local Taxes

Local taxes -- including property taxes, sales tax and local income taxes -- help finance various local projects and initiatives. This can include economic development projects to help attract businesses to the area. Local tax dollars also help develop and support various resources and projects focused on providing educational and extracurricular activities in low-income neighborhoods. Local tax revenue also helps support area schools and maintain county and city parks and natural resources.


Other Considerations

When considering where tax dollars go, think about the public services that local, state, regional and national agencies provide for the community as a whole. This includes helping fund police and fire departments. Ranging from helping pay employees to upgrading equipment when necessary. Tax dollars also help support trash collection in some cities and snow removal in areas prone to winter snow.