Most Americans won’t really “pay their taxes” on April 17 — delayed two days beyond the usual filing date this year, due to Sunday falling on the 15th, followed by the April 16 Emancipation Day holiday in Washington, D.C.
It’s hardly a fresh observation that if it weren’t for the payroll withholding system — if employers didn’t deduct and forward to Washington a designated portion of each paycheck, covering an appropriate portion of each taxpayer’s income, Social Security, and other federal taxes — there’d probably be a nationwide riot on April 15.
Yes, the withholding tax sure helps make the tax bite less painful. But the fact remains that the living standard of each American is reduced not just by the amount missing from that paycheck each week, but also by our share of the levies and regulatory costs each industry is required to fork over to Washington.
Ignoring those regulatory costs, Washington expects to spend $24,106 per American household in 2007 — $4,000 more than it spent a mere six years ago, even after adjusting for inflation.
The government’s tax agencies will squeeze $21,992 per household from the citizens to pay for most of that spending. The rest — $2,114 per household — is deficit spending, funded by borrowing. Unless the government defaults, said principal and interest will have to be paid off by our children and grandchildren.
It sounds like quite a lot. Where on earth does it all go?
Brian Riedl of The Heritage Foundation sat down with his calculator and a stack of federal budgets this year, and came up with the following breakdown:
— Social Security and Medicare: $8,301.
— Defense: $4,951.
— Anti-poverty programs: $3,550.
— Interest on the federal debt: $2,071.
— Federal employee retirement benefits, including military retirements: $907.
— Health research/regulation: $664, up 51 percent since 2001.
— Veterans’ benefits: $627, up 36 percent since 2001.
— Education: $584. Federal spending on school subsidies has surged 62 percent since the 2001 enactment of the No Child Left Behind Act.
— Highways/mass transit: $418.
— Justice administration: $392. — Natural resources/environment: $305. — International affairs: $304. — Unemployment benefits: $299. — Community and regional development (including Katrina relief): $282.
The programs listed above cover $23,655 per household. Buried in the remaining $451 are farm subsidies and a whole lot of “miscellaneous.”
“Taxpayers must decide for themselves if they’re getting their money’s worth,” Mr. Riedl concludes.
Indeed. And it’s worth noting that all the above categories have grown steadily over the past 70 years, regardless of who controlled Congress or the White House.