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People like to complain about taxes. Polls tell us most people think the tax system is unfair and they pay too much. But what most people think is rarely reality. There are many false beliefs about who pays, how much we pay and where it all goes.

“Most conservative criticisms about the ill effects of taxes are exaggerated or untrue. Taxes are in fact good – they are dues we pay to enjoy the numerous vital benefits that government provides for our society” This quote is from Dr. Douglas J. Amy, Professor Emeritus of Politics at Mount Holyoke College and author of Government is Good - An Unapologetic Defense of a Vital institution (a website and book).

Professor Amy does a terrific job countering all the conservative demagoguery on taxes with hard facts and good reasoning. 

In his book he reminds us that, “Taxes are the way we come together as citizens to build communities. They are the way we work together to meet the needs of people and provide ‘public goods’ necessary for a civil society.” 

These goods and services on which our economy, and everyone’s well being, depends include things like roads, water systems, sewer systems, the courts and legal system, public health, safety, labor, financial and consumer protection rules, police and firefighters,  bank deposit insurance, public schools and disaster relief. 

Yet these essential government functions are on the chopping block of the Trump administration. Their cuts are driven by ideological opposition to government, a desire to make money by “privatizing” many of these services, wanting to eliminate restrictions on business and cutting taxes again. 

Never mind that most of us benefit from the programs being cut or that the proposed tax cuts will add $4.5 trillion to the national debt. 

What did your taxes pay for? 

The National Priorities Project (NPP) does an annual “Tax Receipt” that shows how much of your tax dollars are spent on selected activities. On their website you can get a personal receipt based on what you actually paid. 

For example, NPP says the average taxpayer paid $17,766 in federal income taxes in 2024. Of this amount $3,707 was for “defense,” but only $610 went to pay the troops. Military DEI (Diversity, Equity and Inclusion) programs cost only 37 cents. 

Health spending (Medicaid, Medicare, National Institute of Health, Center for Disease Control, etc.) was $4409. Interest on the debt ate $3452. K12 schools got $306. The federal court’s share was $31, diplomacy $52 and the national parks  $14. One dollar and 88 cents went to Public Broadcasting.

My wife and I paid much less than the above average but the pattern was the same. Health spending was the largest at $1737. We were happy to pay our share for federally funded education programs ($320), the Environmental Protection Agency ($50), school lunch and child nutrition ($48), the National Science Foundation ($13), the National Oceanic and Atmospheric Administration ($10 including the National Weather Service) or the Federal Aviation Administration ($9 including air traffic controllers).

The Center for Budget and Policy Priorities (CBPP) says in fiscal year 2024 total federal spending was $6.9 trillion. Taxes and other revenue brought in 4.9 trillion so 2 trillion had to be borrowed. The three largest areas of federal spending were for health, Social Security and defense. 

Note that total spending includes the mandatory budget and discretionary budgets. Social Security and Medicare are in the mandatory budget. Defense spending is most of the discretionary budget.  

The CBPP identifies four health insurance programs as the largest portion of federal spending. Medicare, Medicaid, the Children’s Health Insurance Program (CHIP), and the Affordable Care Act (ACA) subsidies took 24% – $1.7 trillion – of total federal spending. Over half – $912 billion – was for Medicare. Note that Medicare is mostly funded with payroll taxes over a recipient’s lifetime and not income taxes. In addition recipients pay monthly premiums, deductibles and co-pays. Medicare is an insurance program and not a government hand out.

A major reason health care is the biggest expenditure is our irrational, fragmented, for-profit health care system. We refuse to create an efficient national program that could control costs. As a result we have the most expensive health care and highest drug prices in the world.

Social Security in 2024 was 21% – $1.5 trillion – of total federal spending and the second largest expenditure. But Social Security is not funded by income taxes. It is funded by payroll taxes paid by everyone over their working lives. This insurance program provides on average $1,922 per month to 51.5 million retired workers. 

Another 2.6 million spouses and children of retired workers, 5.8 million surviving spouses and children of deceased workers, and 8.4 million disabled workers received benefits. Without this essential program many people would live in poverty. 

The CBPP analysis says “defense” takes 13% of total spending. But their analysis uses only Department of Defense budget numbers ($872 billion in 2024). When all war and “national security” expenditures are counted, the real total is around $1.2 trillion. Despite the militaristic propaganda military spending is largely waste that does little to improve our lives or our society.

Another major expenditure is interest on the national debt. For the first time, this is exceeding defense spending. A  variety of tax breaks and business subsidies also cost large amounts of money. Called “tax expenditures” these tax deductions have the same impact, by decreasing revenue, as increases in spending.

The bottom line is government budgets, spending and taxes are about choices. It is about setting priorities for what we want for ourselves and the country. 

Do we want health care or a massive war machine? 

Do we want education or corporate welfare? 

Do we want to invest in debt free college, job training,  protecting the environment, green energy, science research or the many other things we need to have a prosperous, clean, safe and sustainable communities? Or do we want to cut taxes? 

Professor Amy says we are not better off cutting taxes at the expense of important public services. The money saved is not worth the long term costs to people or our country. 

But the siren call of tax cuts has been a winning political “wedge issue” politicians have exploited from the beginning. He says “The anti-tax arguments of conservatives and libertarians rely heavily on denying the connection between the people and their government. They do not want us to see public money as “our” money being spent for “our” benefit.”

Run your own tax receipt at the National Priorities Project website (nationalpriorities.org). I think you will find your priorities don’t match those of the politicians.