We all see a portion of our paychecks being withheld for federal income taxes, along with Social Security and Medicare taxes. And by mid-April of each year, we must pay the remaining tab to Uncle Sam – or we get reimbursed for overpayment in the form of a tax refund.
But where do our tax dollars go? It’s not that easy for the average taxpayer to figure out. If you look at the proposed budget released in February, the estimated outlays in the 160-page document reflect President Donald Trump’s wish list rather than reality.
Last May the Congressional Budget Office came up with its estimates for revenues and baseline expenses — those which have already been approved — for fiscal year 2018, which ended September 30. The upshot:
- Outlays: $4.131 trillion
- Revenues: $3.329 trillion
- Deficit: $779 billion
These numbers won’t be finalized for a few months.
Notice that our tax dollars, in the form of revenues, don’t cover expenses. So the government has to borrow money by selling Treasury securities on a regular basis.
Read on to get a ballpark idea of how the federal government spends our tax dollars.