Two Cents
How Do Your Tax Dollars Get Spent?
4/10/2019 | 4m 35sVideo has Closed Captions
Have you ever stopped to figure out what is being bought with your tax money?
Remember when you received your first paycheck at your first job and the amount was a little lower than expected? Surprise! Some of that money was already spent for you. Have you ever stopped to figure out exactly WHAT is being bought with all that money you send to Washington each year?
Problems playing video? | Closed Captioning Feedback
Problems playing video? | Closed Captioning Feedback
Two Cents
How Do Your Tax Dollars Get Spent?
4/10/2019 | 4m 35sVideo has Closed Captions
Remember when you received your first paycheck at your first job and the amount was a little lower than expected? Surprise! Some of that money was already spent for you. Have you ever stopped to figure out exactly WHAT is being bought with all that money you send to Washington each year?
Problems playing video? | Closed Captioning Feedback
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Learn Moreabout PBS online sponsorshipNARRATOR: Do you remember the very first job you ever had?
Maybe it was bussing tables, bagging groceries, 4 or working as a lifeguard.
You put in your hours keeping track of how much you expected to make, and when that first paycheck arrived, you opened it up, and surprise.
Some of that money had already been spent for you.
If you've ever looked closely at your pay stub, you probably noticed that Uncle Sam's portion is broken into two main categories, the Federal Insurance Contributions Act, a.k.a.
FICA, and federal income tax.
The first one is essentially a Federal Insurance program for the elderly, and helps pay for retirement and medical programs for older Americans.
Income tax rates have varied wildly throughout history.
Before 1913, they were actually forbidden by the US Constitution.
Thanks 16th amendment.
As recently as 1981, the top tax rate was 70% for singles earning over $108,300.
And the highest rate on record was in 1945 with a top rate of 94% for the ultra wealthy.
These days, tax rates aren't quite so high.
But no matter how much the federal government takes from your paycheck, you should know what it's being spent on.
Have you ever stopped to figure out exactly what is being bought with that money you send to Washington each year?
I think it's time to run the numbers.
NARRATOR: This is Tabitha.
She works in HR, and made $40,000 in 2017.
After exemptions and deductions, her taxable income is $29,600, placing her in the 15% marginal tax bracket.
Tabitha lives in a state with no state income tax, so at the end of the year, she ended up paying $7,038 in federal taxes.
Nearly half goes to Social Security and Medicare.
These taxes known as payroll taxes are spent on health insurance and income for the disabled and people in retirement, like Tabitha's grandparents.
Gram gram and pop-pop paid their FICA taxes when they were Tabitha's age, and now they're enjoying the benefits, just like Tabitha will some day.
That leaves $3,978 of Tabitha's federal income tax left to be spent.
The largest chunk of your federal income tax goes to medical programs that help low income families, like Medicaid and CHIP.
That means that, including FICA, almost 60% of Tabitha's federal taxes are basically going towards insurance programs.
$930 of Tabitha's salary supports men and women enlisted in the armed forces, plus it pays for fighter jets, submarines, and Pentagon staff.
Tabitha may not realize it, but she's on the hook for America's loans.
$525 up her income tax goes to pay back the debt the government borrows to stay afloat, plus interest.
$298 goes to unemployment and labor programs, $238 to veterans benefits like VA hospital and veteran job training programs, $179 goes to food and agriculture, and $167 of Tabitha's salary helps keep the government running funding agencies like the FBI, border patrol, federal prisons, and even the salaries of her senators.
NARRATOR: Tabitha spends $127 on transportation agencies, like the FAA and TSA, and $111 on education, including Pell grants and the National Endowment for the Arts.
She gives $83 a year to housing and community programs, $63 a year to energy and the environment, $51 a year for International Affairs, like the State Department and Peace Corps, and $39 a year to fund America's science programs, which includes all federal scientific research and space exploration.
NARRATOR: Although it might seem like those dollars just vanish from your paycheck, the money you pay the federal government affects real people and changes our world every day.
It would be hard to find one of these expenses that doesn't touch your life or the life of someone you love.
And guess what, these numbers aren't set in stone.
You can contact your local representative, national lobby groups and educate yourself.
The money our government collects in taxes doesn't belong to any one person or agency, it belongs to all of us collectively, and we should all get a say in how it's spent.
And that's our 2 cents.
- Science and Nature
A series about fails in history that have resulted in major discoveries and inventions.
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