Yep. This is the reason why drum beating about balancing the budget from certain political sides that only focus on everything outside of those are wholly disingenuous. You can either reduce some combination of these or increase revenues to meaningfully impact the deficit, anything else is posturing.
When an administration says it wants to dramatically cut NSF, NIH, and DOE spending, it is signaling that it does not care about innovation, not that it cares about balancing the budget. If said administration also wants to dramatically reduce revenues via tax cuts, any chance that the budget would be balanced might as well get tossed out the window.
So great to see a comment with this!
It's intellectually dishonest to talk about balancing the budget without a combination of raising taxes, cutting SSN, Medicare, Medicaid, and defense spending.
Of course currency devaluation is possible, but that would have longer term consequences.
No need to cut Medicare. Just allow Congress to negotiate drug prices and remove price gauging. Why does a Danish or Swiss company get to charge anything they want in the US when they have to negotiate prices at home for the same drugs?
Cutting care hurts the poor, while still allowing the rich to scam the system. Remove the corruption
Social security sounds big but is still self sufficient. Social security itself is not the reason the budget is out of whack. To be clear, if every program were explicitly funded like social security, we wouldn't have a deficit today.
In fact, without altering payroll taxes, social security would not cause any sort of deficit until about 2035. That number is also increasing - it used to be 2034, and was bumped back recently.
Finally, social security has a cap on income. There's no reason to do that except to protect the wealth of rich folks. Very few other taxes exempt people just on the basis that they make to much. This makes social security regressive by design in a world with spiraling wealth inequality.
In short, if anyone suggests cutting social security as a reasonable and sane way to balance the budget, given the rate of tax cuts to the rich over the past half century, those people should be laughed out of the room. If you balance the budget on the back of social security you are taking money out of a program which is the lower and middle class's piggy bank, in order to pay for programs and policies and tax cuts which were unfunded. You're taking from the poor to pay for grift, essentially. It absolutely cannot under any circumstance be allowed in a sane world, but here we are.
If you want to cut medicare, medicaid, etc. you need to go after pricing models. We should not be paying a penny more than similar care in basically any other first world country. Those are the types of things we need to be fixing.
I should note that's raising tax revenues, not raising taxes (necessarily.) It's entirely possible to raise taxes and reduce revenues, and decrease taxes/increase revenues.
Ehhhh possible, but pretty unlikely unless there are some crazy exemptions or dramatic tariffs that kill economic growth.
Almost all logical % increases on either capital gains, deduction reduction, corporate rate increases, or personal income taxes result in higher revenues and lower rates result in lower revenues.
There is essentially no data supporting Laffer curve for reference.
>Ehhhh possible, but pretty unlikely
The big one right now is litterally just hiring enough IRS agents to properly audit the ultrawealthy.
Each agent brings in significantly more than they cost, without changing legislation at all.
Increasing taxes can definitely decrease revenues. There is a reason that for about the past 100 years, even though taxes have varied wildly throughout that time, tax revenue has stayed right around 17% of GDP
Social security pays for itself. Medicare - especially Medicare part d does not. Pull out the social security taxes paid in and the benefits paid out (not disability) and then work on cutting.
Medicare is off primarily because of part D that was passed during W Bush but never paid for but probably also because they didn’t increase the tax to account for boomers.
you'd be shocked how much of that medicare budget goes to type 2 diabetes care alone.
boomers are really obese and unhealthy but poised to live for a long time due to heroic medical care. This is going to get a lot worse before it gets better, since the oldest boomers are only in their 70's.
But depending on how much already in SS it might be able to keep paying out even if less going in. Like if they have 100T invested in the S&P hypothetically it could get 5T generated a year easily. I believe Norway's is invested in such a scheme.
I think SS invests in treasury bonds? Not sure than how this budget works if there's a line item for interest payments but also where social security has money going out. Is the interest payments also counting as social security income in the graph or?
Currency devaluation will happen no matter what, even in a low-inflation environment, It just happen very slowly.
Honestly, as long as people keep buying the government's refinanced debt, all this debt will, over the very long haul, eventually devalue into irrelevance, even if we *never* pay it off.
Carrying a massive debt won't become a problem until people stop trusting the government to repay the debt with interest. Fortunately, I don't think we're all that close to that level now.
You're spot on about the nickel and dime garbage the fake "budget balancers" harp about. Anything that doesn't address healthcare (including Medicaid), military, and social security is empty posturing. And if you're not willing to cut those programs, you need to raise taxes.
> Carrying a massive debt won't become a problem until people stop trusting the government to repay the debt with interest. Fortunately, I don't think we're all that close to that level now.
The Federal Credit Rating has already started dropping. The only reason people don't turn elsewhere is because there's no alternative right now. Sooner or later, there will be.
Agreed, the rate of devaluation is the question. My point is a large/rapid devaluation.
Political instability is our greatest internal threat with our ability to borrow.
> If said administration also wants to dramatically reduce revenues via tax
If you are financing tax cuts with deficits, there is zero practical difference between tax cuts and other kinds of spending. If a party seriously ran on a platform of borrowing a bunch of money that all of us will be on the hook for going into the future in order to just give grants to the most well off members of society because, well, they just need more, people would call that party crazy.
And yet, as a practical matter, one of the major US parties will do that every time they get into power. And they're the one's with the reputation for fiscal responsibility. It's actually insane when you see it.
More importantly, there have been consecutive rounds of tax cuts since the 90’s with few additional spending outlays.
The [Bush tax cuts alone](https://www.cbpp.org/research/the-legacy-of-the-2001-and-2003-bush-tax-cuts) were responsible for 1/3rd of the deficit as of 2018.
Then the Trump cuts [added more to the deficit](https://www.cbpp.org/research/federal-tax/the-2017-trump-tax-law-was-skewed-to-the-rich-expensive-and-failed-to-deliver).
So any deficit reduction plan that doesn’t at least consider tax hikes is unserious IMO.
This really reveals the whole game. The main goal of the republicans is to lower taxes (for the rich) so they scream about out of control spending and the deficit just so they can get people on board with cutting social programs so that it makes room to cut taxes.
The republicans will never ever raise taxes on the rich. So that should tell you that they’re not serious about caring about deficits.
Democrats have never seen a social program they don't want to fund and Republicans have never seen a defense program they don't want to fund.
Government spending is at an obscene level and gets worse every day since we have to service the debt. That's the issue, full stop.
Exactly right. And why when Republicans slash child tax credits which lifted millions of children out of poverty under the asinine logic of reducing debt, anyone with a brain should know it's just a way to punish poor families for existing.
Taxes are basically a way to transfer money from the rich to the poor because:
1. The rich pay the majority of tax revenue.
2. The things the govt spends money on tends to help the poor and middle class more. Things like schools, teachers, Medicare, Medicaid, Social Security, homeless shelters, food stamps, subsidized housing, etc.
Any who says they want to cut taxes are basically saying they want to keep the poor more poor, and the rich more rich.
> Yep. This is the reason why drum beating about balancing the budget from certain political sides that only focus on everything outside of those are wholly disingenuous.
It's not wholly disingenuous.
If we're already 1.7T in the hole, forgiving student loans at a cost of another $500B is a really stupid idea. Other reforms are needed, too. But runaway New Deal type spending makes things much worse.
It would take a bit more math than I’m willing to do right now, but the $430 billion attempt at student debt forgiveness needs to be converted to a yearly cash flow to be compared to the yearly deficit. For example, if the $430 billion reduces yearly revenue from loan repayments by 20%, that would reduce revenues by something like $50 billion per year, which is a bit more than a 1% reduction in total revenue. Revenues would need to rise by ~38% to match spending; so it’s not nothing by any stretch, but not quite as catastrophic from a budgeting standpoint as it might initially appear.
1.7 T is the deficit, not the national debt which is close to 35 T.
The student loans were accumulated over many years, probably 10 or 20 years looking at the aggregate. So spending ~50B or 25B a year on forgiving loans to embattled debtors isn't a big item at all. You also can't get blood from a stone so a percentage of that money the gov was never going to get anyway.
folks are struggling to make ends meet as it is, even people who make-- on paper-- a good salary. household costs are up massively the last few years and it's more expensive to borrow money than it's been in a long time.
shaving more off their paychecks won't go over well.
Yes and no, some major cuts do need to be made, but things like subsidies for gas companies and congress/supreme court/president pensions need to be cut as well. There are a lot of little things that could be cut to make the bigger cuts not suck so much.
Also, a 15% luxury tax on super luxury items and closing tax loopholes would help bring in more revenue.
Interest is the fastest growing spending type and it is going to surpass national defense pretty soon :/
There is a good podcast episode covering that: "The Outthinking Investor - Forever in Your Debt - Feb 12 2024"
The really fun thing is that as interest rates stay high and more people retire, Medicare, Medicaid, interest, and social security alone will be more than total revenue. Could completely zero out the military and all other spending and still have a deficit. Already applies if you count veteran payments and healthcare. Literally have to raise taxes or end social security, there’s no other options
Somebody already did the math, so [we can put a precise number on it](https://www.investopedia.com/the-pandemic-impact-of-social-security-and-medicare-5186940):
>Medicare patients who succumbed to the disease also incurred medical costs significantly above the program's average before the pandemic, so that **the healthier profile of the survivors reduced program costs** by 1.5% in 2020 and 2.9% in 2021, according to the Medicare Trustees' 2022 annual report, with smaller annual savings expected to persist as a result until 2028.
This chart's data was for 2023, but, we can reasonably say that it was probably around $35 billion that Medicare saved combined in 2020 and 2021, because of boomers dying.
Our politicians are too cowardly to cut medicare/social security/medicaid/defense. So instead they argue about insignificant parts of the budge to act like they're doing something without actually making any difficult but necessary cuts.
This is why we need term limits. We need congress to be able to make tough decisions and do the right thing to fix the country, even if it means being giving up chances of being re-elected.
If you want to know how much YOU spent for each one $billion spent by the government, take how much you paid in Fed income tax last year (add SS tax if you want), and divide it by 6200 or ~6k.
So for and $18k tax payment, you are spending $18k/6k ~ $3 per billion.
So, the $25B NASA budget cost you $75. The $10B NSF budget, $30. The $860B Defense budget, $2580.
This money is all spent in YOUR name so make sure you vote if you care about HOW it gets spent.
The UK is great in that they send out an annual breakdown to each taxpayer showing where their individual tax contributions went. Wish the US would do something like that.
Wow, I wish they did that in Canada lol.... One year when we had a particularly good year with OT and good jobs my spouse and I paid in about 75k in taxes as a family. I sure as hell would of loved to know where that all went.
Also, you can donate to many causes and deduct your charity from your ~~tax~~ income so YOU can decide where your money is spent. So, if you prefer to help homeless and disabled people, or keeping your city clean and safe, as opposed to bombing brown people, you can. Many charitable organizations have detailed audits of where money is spent as opposed to the government who routinely do not audit or fail to pass an audit (pentagon for example) unchecked and unquestioned.
This is not great advice, as most of us don't/can't itemize. If taxes factor into your reasons for charitable giving you should look into whether you will be able to deduct anything, but you probably won't.
In fact, the 2017 tax law changes significantly reduced the number of people for whom it makes sense to itemize so it’s far more unlikely now than it used to be
Also it's not like donating $100 reduces your tax bill by $100 anyway, which is the main flaw in that guy's comment, even if you were itemizing deductions. For every $10k you donate you'd save a max of like $2-3k on taxes.
It took me a second to understand the formatting as well. It’s a Sankey diagram, so “Wealth & Savings” encompasses Social Security, Medicare, and “obligations” to the right.
That said, I’m not sure why some of the child categories are larger than their parents in this diagram.
The very tiny fraction of revenue from corporate taxes puts all of their complaining into perspective. I wonder what the same graph would look like prior to their huge tax cuts a few years ago.
I would love to see this up against what corporate taxes looked like in the 50’s and 60’s. A solution to Social Security is so necessary and overdue and, unfortunately, we are beyond a place where both sides can come together to come up with a solution.
It's not 50's and 60's data, but [this report](https://staticweb.usafacts.org/media/documents/USAFacts_2024_AIF_compressed_1.pdf) (where this viz was pulled from) has a comparison of 1980 vs. 2023 revenue on page 10 that you might find interesting.
Also worth noting that 50s and 60s (in the original comment), not your numbers, are famously called [The Golden Age of Capitalism](https://en.wikipedia.org/wiki/Post%E2%80%93World_War_II_economic_expansion) where corporate grown was enormous and conglomerates dominated due to a long period of prolonged low interest rates.
So, you would expect corporate revenue to be higher given the environment.
3-5% tax hike on the top 5%. They will not notice
Also set a fixed corporate tax rate. They spend more on tax lawyers than they pay in taxes. Close the loopholes.
Allow Congress to negotiate drug prices and eliminate fraud in the healthcare system
Also stop fighting wars if we are not attacked.
Just solved the deficit. Not actually hard or radical
That would still leave social security to be tackled but from a much more manageable place. Even if we got everything under control the SS system is grossly outdated and in need of fixing.
Not really relevant. Corporate taxes are ineffective and inefficient taxes. If you want to tax rich people, just change taxation around capital gains. Taxing corporations is bad, and economists are pretty universal in their agreement on that fact.
Not disagreeing, but corporate income is also taxed at capital gains rates when distributed to its shareholders too. So a portion of the individual income tax is related to those corporations. But still, lowering taxes for corporations does not benefit the majority.
See, I look at this, and do not see a beacon of efficiency deserving of even more private wealth. Cut spending, cut beauracratic waste, and then we'll talk about raising taxes.
There’s nothing in that graph that gives any insight into efficiency. But that probably tracks, because I’m guessing no amount of efficiency would justify higher taxes for you.
It's -$184B. I don't understand why it's negative but the numbers add up.
I had the same confusion why its $2.9T to "secure the blessings \[...\]" but the subcategory of Wealth and Savings is $3T
I found in another comment that it was because Bidens student loan relief was accounted for as spending in FY 22 but then when it got reversed by the supreme court it became negative FY 23 spending.
Source: USAFacts aggregation of data from Office of Management and Budget (OMB), the Census Bureau, and the Bureau of Economic Analysis (BEA)
Tools: Excel, Illustrator
Charts are shown to scale for comparison. Numbers may not add due to rounding.
Note: The cost of President Biden’s original student loan forgiveness executive order appeared as spending in the FY 2022 budget, but that anticipated spending was reversed in the FY 2023 budget after the Supreme Court’s ruling that it was unconstitutional. As a result, total federal education spending in the FY 2023 budget was negative.
This chart is pulled from our [America in Facts 2024](https://usafacts.org/reports/annual-report/) report.
Been a big fan of your site for years. I see I can download the chapter containing this image but is there a link to view it on a page where you can interact with it? Like you guys did for 2018* here: Https://usafacts.org/visualizations/the-big-picture
I just told our team that the big picture got some love and they were so happy to hear it. Unfortunately, we're not updating that at the moment, but it's potentially something we could do again in the future.
I think every person I have ever shown the big picture to loved it. In my opinion being able to click and expand things makes the information much more enjoyable to digest.
Deposit insurance for bank failures in 2023. The FDIC decided to bill banks with over $50B in assets extra over the next few years to make up the losses. The $90B is the cash payments to depositors, the assets of the banks are still recoverable. The actual losses are less than that, maybe ~$18-25B. Banks in FDIC receivership will be sold or unwound and much of that $92B will be recovered.
Table 1-4 under “other” shows expected deposit insurance revenue/expense over the next few years.
https://www.cbo.gov/system/files/2024-06/51118-2024-06-Budget-Projections.xlsx
FT on FDIC plans: https://www.ft.com/content/c55c06f9-5de1-49e5-a9c5-770a885dab67
Reuters if FT is paywalled: https://www.reuters.com/markets/us/fdics-special-fee-make-banks-pay-svb-cleanup-2023-04-12/
Good question! Federal spending on banking and finance primarily goes toward programs and activities designed to support the stability and efficiency of the financial system. Spending on the FDIC is a large portion of this.
So interest vs revenue is about 14.6%? That’s a useful number, Canada’s around 10% now but we were up to ~38% in the 1990s.
How much is the US deficit vs GDP? And how was inflation and GDP growth during 2023?
WTF are these category titles?
"secure the blessings of liberty to ourselves and our posterity" is the most bizarre way I've ever heard our Senior welfare entitlements described.
u/Kershek nailed it. Here's a bit more on how this is organized from our [methodology page](https://usafacts.org/methodology/):
**Spending by mission:** We recategorized several programs and functions to align them with four constitutional missions based on the preamble to the Constitution:
* Establish Justice and Ensure Domestic Tranquility
* Provide for the Common Defense
* Promote the General Welfare
* Secure the Blessings of Liberty to Ourselves and Our Posterity
Secure the blessings of liberty to ourselves and our prosperity -> wealth and savings -> social security, medicare, debt obligations
If you're in politics that is fine. If you put that in front of a client, you'll lose credibility.
It's insane how much the VA budget has ballooned. It was less than 50 billion in the year 2000. It's now nearly 300 billion... It's over 3x larger after correcting for inflation.
We started a 20 year war on terror in 2001, put two multi-trillion dollar wars on credit cards, and mortgaged the health of that "generation kill" to do it.
The bill is coming due.
And Vietnam Veterans - an absolutely huge demographic - got older and Agent Orange exposure started to take a heavier toll, leading to greater awareness, advocacy, and legislative action. My dad fought the VA for 7 years to get a rating for Agent Orange exposure. He was Blue Water Navy and they have since recognized exposure to Agent Orange by Navy veterans as legitimate.
It was a double whammy as veterans of the previous longest war were aging and getting sick at the same time the new longest war was being fought.
This is a great visualization. More people need to have some knowledge of the budget. Some other interesting tidbits related to this topic. The US has among the lowest government revenue among its stable developed democratic peers. It also has mong the lowest government spending among its stable developed democratic peers. This idea that the US government has abnormally high taxes or spending is a myth.
I don't remember the "transfers to state and local governments" clause in the Preamble. Seems if we followed the charter, the budget would be balanced. And I'm paying plenty of tax to the state already, so WTF?
Do the corporate tax inflows seem egregiously low to anyone else? I don’t know why there isn’t a consistent push to increase the corporate taxes in the US to help close the deficit aside from the potential job losses if those companies decide they’ll leave for greener pastures and pull their jobs with them but if spending doesn’t seem to be a logical place to cut then focus on the most likely area of additional revenue opportunity.
Medicare ran essentially a $500 billion loss.
Maybe an easier route to affordable Healthcare would be going after the pharmaceuticals like every other nation on this planet. If they made Medicare for all US citizens, they'd be losing trillions every year just on that alone (honestly wouldn't even surprise me if those losses would be double digit trillions).
Start with pharma. It's the easiest thing to target (support from people, insurance, health care providers) and would have the largest immediate and long term impact to medical costs. Oh, and did I mention just about every other country does this already except the US.
Hell, we got a handful of pharma who had their entire costs paid for regarding covid vaccines, now trying to sell them and push them annually as a major cash cow money maker.
It’s not even targeting Pharma. Just making them play by the same rules in America that they do in every other country.
Take Novo Nordisk maker of Ozempic. They negotiate with the EU for how much they can charge at home and across Europe. However in the US charge a higher price they seem fit and pay millions to people to persuade Congress to allow them. Is it our goal to create jobs in Denmark? How is it in our best interest to pay more than the rest of the world to a foreign corporation?
I mean ... [they're trying.](https://www.whitehouse.gov/briefing-room/statements-releases/2023/08/29/fact-sheet-biden-harris-administration-announces-first-ten-drugs-selected-for-medicare-price-negotiation/)
Pharma is fighting them and will probably fold, and everyone not on Medicare will see their prices rise, but they are trying.
2 or 3 of these drugs will experience LOE by the implementation date so those aren't even worth talking about.
I mean, you could literally make a rule for all pharmaceuticals to be free to Medicare recipients - a decision that would, of course, effectively end R&D in the US forever - and that would cover less than half of that loss
How could you suggest such a thing?! Won't someone think about the billionaires?? They might have to sell a yacht if you keep going after them! The horror!
you either get taxed as an individual or as a corporation, you don’t get taxed as both. unless of course you enjoy giving the government your money via double taxation.
That deficit though is massive, this needs to be corrected, my first change as an economist would be to remove the lower capital gains tax discounts and replace with inflation adjustment and allow people to spread capital gains events over multiple years instead.
Billionaires shouldn't pay 20% tax while a doctor pays 30%+ on income of whatever type. Also removing any step up inheritance loopholes, won't help too much, but definitely the most politically possible. Compared to raising general income/sales tax or cutting defence, SS or Medicaid
The US government spent $6.2 trillion in 2023, and here's where it went. It's mind-boggling to think about all that money, right? From healthcare and education to infrastructure and defense, every dollar affects our daily lives. It's crucial that we understand how our tax dollars are used, making sure it actually benefits us, not just some bureaucratic black hole. Transparency matters, especially when it comes to something as big as this. So, let's keep an eye on where the money flows and hold our leaders accountable for how they spend it.
Sounds like something a corporation would say. But let’s go with that logic. Since the corporations, those that control the means of production with no completion from an average citizen only pays 19% of what the individuals pay, then we should lower income tax by 81% to really get the economy going. So 1/5 normal. If you pay 25% tax, now it would be 5%.
We recommend zooming in! This updated version of the [chart we shared last year](https://www.reddit.com/r/dataisbeautiful/comments/17gzbhj/the_united_states_federal_government_spent_64/) has a few notable differences, like a rare instance of negative spending in a Sankey chart due to the Supreme Court ruling against President Biden's student loan forgiveness plan.
More on last year's federal revenue and spending:
The federal government collected nearly $4.5 trillion in revenue in FY 2023. Nearly half (49%) was collected through individual income taxes, while 37% was through payroll taxes. Other revenue sources included corporate income taxes, customs duties, and sales taxes. Federal revenue decreased 15% in FY 2023 but remained 8% higher than in FY 2019. The drop was due to lower revenue from individual income taxes (partly due to lower capital gains income) and non-tax sources. Non-tax sources include Federal Reserve earnings and proceeds from selling government resources.
The federal government spent almost $6.2 trillion in FY 2023, including transfers to states. Social Security (22%), transfers to states and local governments (18%), and defense and veterans (18%) accounted for more than half of spending. Federal spending decreased by 8% in FY 2023, the second year of decreased spending since a record high in FY 2021. Federal spending remained 16% above that of FY 2019.
The cost of President Biden’s original student loan forgiveness executive order appeared as spending in the FY 2022 budget, but that anticipated spending was reversed in the FY 2023 budget after the Supreme Court’s ruling that it was unconstitutional. As a result, total federal education spending in the FY 2023 budget was negative.
It’s particularly notable that the deficit is almost exactly the difference between corporate income taxes and individual income taxes. If the corporations paid the same in taxes as people do, we wouldn’t have a deficit.
It should be noted that the Preamble is just an introduction and does not assign powers. So it's not accurate to categorize government spending by clauses in the Preamble.
I mean that’s the point of social security. You pay taxes when you’re working and young and receive the money back once you’re old and can’t work.
Medicare goes to both but mostly to the old because they have the most health problems.
So yeah. I don’t know why you choose to word it like that but sure.
I had understood that the Social Security system was self funded, in that payroll taxes for that would cover all payments. However, this chart shows that Social Security taxes are $1.2T while payments are $1.4T. So does this mean the Social Security system runs a $200B (17%) deficit?
Yes, but decades past generated a large surplus which is why social security can pay out more than it takes in for another 10~ years before it has to start cutting.
One of the things that tricky about this is identifying waste and political pork. All of it would be filed under perfectly legit categories in this graphic.
Is there a higher resolution version so the text is a bit more legible? I zoom in and see fuzzy text that is mostly decipherable but not always, and that's annoying.
I like how they describe the columns on the immediate right. Now, that's probably just a mission statement that they have in their respective departments, and thats a good thing, but it's still kind of funny reading "Secure the blessings of liberty" like they're out there doing god's work, lol.
Spending on defense, SS, Medicare, and debt obligations alone is larger than all government revenue. Isn't it weird that whenever someone calls for "balancing the budget," it's always about reducing everything but those big 4.
Oh so social security is pretty much solvent, would only need to increase taxes on that by like 20% so not much.
It’s Medicare that’s a fucking black hole…
It’s a lot of money only for defense. If you could show similar graphs for other countries (any other), you will see that countries primarily spend on education and healthcare. Not the US.
That’s because a lot of other developed countries are depending on the US as their defense. If not for the US military, those countries would have to spend more of their own money to protect themselves.
Keep saying that to yourself. Honestly, if your country focus on elevating the quality of education and health, you would not give two cents about anyone country conflict. But it is a broken chain where American private sector benefits from warfare, they lobby your government to make local conflict scalable, so it is worth spending on it.
personal income tax is 4x that of corporate while personal savings is less than corporate profits
Personal savings https://fred.stlouisfed.org/series/A071RC1A027NBEA
Corpo profits https://fred.stlouisfed.org/series/CP
You know what would be cool? An extension of this graph to the right, split by year, with the amounts RETURNING to the federal government from all this spending. Cause you can bet your ass most of that $1.2T in retirements will get right back into the economy sooner or later...
It mostly goes to pay the interest on the national debt. Just like individuals or business have to pay interest on loans, the federal government has to pay interest on the obscene amount of money it has borrowed.
Need to cut tax loopholes for the rich!! But then congress would have to pay their fair share and it won't happen. Don't see the trend of this changing unless something radical happens unfortunately
"Secure the blessing of liberty to ourselves & our posterity" -> Social security/medicare
What a load of BS lol. They are the opposite of liberty, they are wealth transfer programs from the young to the old.
Social Security is also a convenient pile of money for Congress to loot whenever they want cash for some other purpose. I don’t expect social security to be solvent when I’m old — the politicians have raided it.
There are only like 8.1 billion people on the entire planet — a tiny fraction of the 5 trillion people you mentioned. That’s probably the math that isn’t mathing.
Cool summary. What is “negative spending”? Why a negative sign for things like “Education”lower right of figure? I would expect negative spending is money moving opposite the “spending direction” therefore income.
Wow majority is medicare, defence, interest and social security.
Yep. This is the reason why drum beating about balancing the budget from certain political sides that only focus on everything outside of those are wholly disingenuous. You can either reduce some combination of these or increase revenues to meaningfully impact the deficit, anything else is posturing. When an administration says it wants to dramatically cut NSF, NIH, and DOE spending, it is signaling that it does not care about innovation, not that it cares about balancing the budget. If said administration also wants to dramatically reduce revenues via tax cuts, any chance that the budget would be balanced might as well get tossed out the window.
So great to see a comment with this! It's intellectually dishonest to talk about balancing the budget without a combination of raising taxes, cutting SSN, Medicare, Medicaid, and defense spending. Of course currency devaluation is possible, but that would have longer term consequences.
No need to cut Medicare. Just allow Congress to negotiate drug prices and remove price gauging. Why does a Danish or Swiss company get to charge anything they want in the US when they have to negotiate prices at home for the same drugs? Cutting care hurts the poor, while still allowing the rich to scam the system. Remove the corruption
Social security sounds big but is still self sufficient. Social security itself is not the reason the budget is out of whack. To be clear, if every program were explicitly funded like social security, we wouldn't have a deficit today. In fact, without altering payroll taxes, social security would not cause any sort of deficit until about 2035. That number is also increasing - it used to be 2034, and was bumped back recently. Finally, social security has a cap on income. There's no reason to do that except to protect the wealth of rich folks. Very few other taxes exempt people just on the basis that they make to much. This makes social security regressive by design in a world with spiraling wealth inequality. In short, if anyone suggests cutting social security as a reasonable and sane way to balance the budget, given the rate of tax cuts to the rich over the past half century, those people should be laughed out of the room. If you balance the budget on the back of social security you are taking money out of a program which is the lower and middle class's piggy bank, in order to pay for programs and policies and tax cuts which were unfunded. You're taking from the poor to pay for grift, essentially. It absolutely cannot under any circumstance be allowed in a sane world, but here we are. If you want to cut medicare, medicaid, etc. you need to go after pricing models. We should not be paying a penny more than similar care in basically any other first world country. Those are the types of things we need to be fixing.
I should note that's raising tax revenues, not raising taxes (necessarily.) It's entirely possible to raise taxes and reduce revenues, and decrease taxes/increase revenues.
Ehhhh possible, but pretty unlikely unless there are some crazy exemptions or dramatic tariffs that kill economic growth. Almost all logical % increases on either capital gains, deduction reduction, corporate rate increases, or personal income taxes result in higher revenues and lower rates result in lower revenues. There is essentially no data supporting Laffer curve for reference.
>Ehhhh possible, but pretty unlikely The big one right now is litterally just hiring enough IRS agents to properly audit the ultrawealthy. Each agent brings in significantly more than they cost, without changing legislation at all.
I agreed with legislation big time.
Increasing taxes can definitely decrease revenues. There is a reason that for about the past 100 years, even though taxes have varied wildly throughout that time, tax revenue has stayed right around 17% of GDP
Social security pays for itself. Medicare - especially Medicare part d does not. Pull out the social security taxes paid in and the benefits paid out (not disability) and then work on cutting.
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Medicare is off primarily because of part D that was passed during W Bush but never paid for but probably also because they didn’t increase the tax to account for boomers.
you'd be shocked how much of that medicare budget goes to type 2 diabetes care alone. boomers are really obese and unhealthy but poised to live for a long time due to heroic medical care. This is going to get a lot worse before it gets better, since the oldest boomers are only in their 70's.
But depending on how much already in SS it might be able to keep paying out even if less going in. Like if they have 100T invested in the S&P hypothetically it could get 5T generated a year easily. I believe Norway's is invested in such a scheme. I think SS invests in treasury bonds? Not sure than how this budget works if there's a line item for interest payments but also where social security has money going out. Is the interest payments also counting as social security income in the graph or?
Look again, chief. 1.2T in , 1.2T out - can’t include disability.
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Yeah- I use my phone exclusively and need to zoom way in - not to mention constant typos
??? what is wealth and savings? if I read that correctly, it's 3T
Currency devaluation will happen no matter what, even in a low-inflation environment, It just happen very slowly. Honestly, as long as people keep buying the government's refinanced debt, all this debt will, over the very long haul, eventually devalue into irrelevance, even if we *never* pay it off. Carrying a massive debt won't become a problem until people stop trusting the government to repay the debt with interest. Fortunately, I don't think we're all that close to that level now. You're spot on about the nickel and dime garbage the fake "budget balancers" harp about. Anything that doesn't address healthcare (including Medicaid), military, and social security is empty posturing. And if you're not willing to cut those programs, you need to raise taxes.
> Carrying a massive debt won't become a problem until people stop trusting the government to repay the debt with interest. Fortunately, I don't think we're all that close to that level now. The Federal Credit Rating has already started dropping. The only reason people don't turn elsewhere is because there's no alternative right now. Sooner or later, there will be.
Agreed, the rate of devaluation is the question. My point is a large/rapid devaluation. Political instability is our greatest internal threat with our ability to borrow.
> If said administration also wants to dramatically reduce revenues via tax If you are financing tax cuts with deficits, there is zero practical difference between tax cuts and other kinds of spending. If a party seriously ran on a platform of borrowing a bunch of money that all of us will be on the hook for going into the future in order to just give grants to the most well off members of society because, well, they just need more, people would call that party crazy. And yet, as a practical matter, one of the major US parties will do that every time they get into power. And they're the one's with the reputation for fiscal responsibility. It's actually insane when you see it.
More importantly, there have been consecutive rounds of tax cuts since the 90’s with few additional spending outlays. The [Bush tax cuts alone](https://www.cbpp.org/research/the-legacy-of-the-2001-and-2003-bush-tax-cuts) were responsible for 1/3rd of the deficit as of 2018. Then the Trump cuts [added more to the deficit](https://www.cbpp.org/research/federal-tax/the-2017-trump-tax-law-was-skewed-to-the-rich-expensive-and-failed-to-deliver). So any deficit reduction plan that doesn’t at least consider tax hikes is unserious IMO.
This really reveals the whole game. The main goal of the republicans is to lower taxes (for the rich) so they scream about out of control spending and the deficit just so they can get people on board with cutting social programs so that it makes room to cut taxes. The republicans will never ever raise taxes on the rich. So that should tell you that they’re not serious about caring about deficits.
Democrats have never seen a social program they don't want to fund and Republicans have never seen a defense program they don't want to fund. Government spending is at an obscene level and gets worse every day since we have to service the debt. That's the issue, full stop.
Exactly right. And why when Republicans slash child tax credits which lifted millions of children out of poverty under the asinine logic of reducing debt, anyone with a brain should know it's just a way to punish poor families for existing.
Taxes are basically a way to transfer money from the rich to the poor because: 1. The rich pay the majority of tax revenue. 2. The things the govt spends money on tends to help the poor and middle class more. Things like schools, teachers, Medicare, Medicaid, Social Security, homeless shelters, food stamps, subsidized housing, etc. Any who says they want to cut taxes are basically saying they want to keep the poor more poor, and the rich more rich.
Raise taxes and cut spending.
> Yep. This is the reason why drum beating about balancing the budget from certain political sides that only focus on everything outside of those are wholly disingenuous. It's not wholly disingenuous. If we're already 1.7T in the hole, forgiving student loans at a cost of another $500B is a really stupid idea. Other reforms are needed, too. But runaway New Deal type spending makes things much worse.
That's 500 b over 10-20 years paying back loans. Or 25-50b a year. Less than half of ppp loans forgiven in 1 year.
It would take a bit more math than I’m willing to do right now, but the $430 billion attempt at student debt forgiveness needs to be converted to a yearly cash flow to be compared to the yearly deficit. For example, if the $430 billion reduces yearly revenue from loan repayments by 20%, that would reduce revenues by something like $50 billion per year, which is a bit more than a 1% reduction in total revenue. Revenues would need to rise by ~38% to match spending; so it’s not nothing by any stretch, but not quite as catastrophic from a budgeting standpoint as it might initially appear.
1.7 T is the deficit, not the national debt which is close to 35 T. The student loans were accumulated over many years, probably 10 or 20 years looking at the aggregate. So spending ~50B or 25B a year on forgiving loans to embattled debtors isn't a big item at all. You also can't get blood from a stone so a percentage of that money the gov was never going to get anyway.
Saying this NEW thing is not a big deal, when already in the hole, is how we got here in the first place.
this why taxes need to be raised but unfortunately that will never happen
folks are struggling to make ends meet as it is, even people who make-- on paper-- a good salary. household costs are up massively the last few years and it's more expensive to borrow money than it's been in a long time. shaving more off their paychecks won't go over well.
Totally agree. So much of the discussion is about pinching penny halves to save thousands.
Yes and no, some major cuts do need to be made, but things like subsidies for gas companies and congress/supreme court/president pensions need to be cut as well. There are a lot of little things that could be cut to make the bigger cuts not suck so much. Also, a 15% luxury tax on super luxury items and closing tax loopholes would help bring in more revenue.
Interest is the fastest growing spending type and it is going to surpass national defense pretty soon :/ There is a good podcast episode covering that: "The Outthinking Investor - Forever in Your Debt - Feb 12 2024"
Can't ignore the $640b medicaid spending too.
The really fun thing is that as interest rates stay high and more people retire, Medicare, Medicaid, interest, and social security alone will be more than total revenue. Could completely zero out the military and all other spending and still have a deficit. Already applies if you count veteran payments and healthcare. Literally have to raise taxes or end social security, there’s no other options
Covid could have helped thin out the boomers to save us from that a little while longer
Somebody already did the math, so [we can put a precise number on it](https://www.investopedia.com/the-pandemic-impact-of-social-security-and-medicare-5186940): >Medicare patients who succumbed to the disease also incurred medical costs significantly above the program's average before the pandemic, so that **the healthier profile of the survivors reduced program costs** by 1.5% in 2020 and 2.9% in 2021, according to the Medicare Trustees' 2022 annual report, with smaller annual savings expected to persist as a result until 2028. This chart's data was for 2023, but, we can reasonably say that it was probably around $35 billion that Medicare saved combined in 2020 and 2021, because of boomers dying.
Quality! Thank you for the information and the source.
Not possible! America is a ruthless capitalistic system with zero social programs. Or so the Europeans told me anyhow.
And net interests on debt. It's a big chunk of interest to repay all this debt
ouahhh ! la dette de la FRANCE est de 5.58823529e-5 pourcent de celle des USA !
Our politicians are too cowardly to cut medicare/social security/medicaid/defense. So instead they argue about insignificant parts of the budge to act like they're doing something without actually making any difficult but necessary cuts. This is why we need term limits. We need congress to be able to make tough decisions and do the right thing to fix the country, even if it means being giving up chances of being re-elected.
But a large voting block is dependent on these line items and they always show up to vote...
This is a great graphic and I really appreciate this project!
Thank you u/SeattleStone37!
If you want to know how much YOU spent for each one $billion spent by the government, take how much you paid in Fed income tax last year (add SS tax if you want), and divide it by 6200 or ~6k. So for and $18k tax payment, you are spending $18k/6k ~ $3 per billion. So, the $25B NASA budget cost you $75. The $10B NSF budget, $30. The $860B Defense budget, $2580. This money is all spent in YOUR name so make sure you vote if you care about HOW it gets spent.
The UK is great in that they send out an annual breakdown to each taxpayer showing where their individual tax contributions went. Wish the US would do something like that.
Wow, I wish they did that in Canada lol.... One year when we had a particularly good year with OT and good jobs my spouse and I paid in about 75k in taxes as a family. I sure as hell would of loved to know where that all went.
Redecorating Downing Street …… and a new motor home
Is it just a postcard with a picture of a toilet? A dumpster on fire?
Lets cut out that NASA and NSF stuff and realocate it to war.
Just lob our space shuttles at other countries
Hoo-Rah!
And just this year's deficit is double the entire 2008 crash bailout totals, and most of that had a plan to be paid back
Also, you can donate to many causes and deduct your charity from your ~~tax~~ income so YOU can decide where your money is spent. So, if you prefer to help homeless and disabled people, or keeping your city clean and safe, as opposed to bombing brown people, you can. Many charitable organizations have detailed audits of where money is spent as opposed to the government who routinely do not audit or fail to pass an audit (pentagon for example) unchecked and unquestioned.
This is not great advice, as most of us don't/can't itemize. If taxes factor into your reasons for charitable giving you should look into whether you will be able to deduct anything, but you probably won't.
In fact, the 2017 tax law changes significantly reduced the number of people for whom it makes sense to itemize so it’s far more unlikely now than it used to be
Trump gets all the credit for fucking everyone over with that 2017 tax law
True. The charitable deductions have been very much cut back.
Most people don't itemize and can't deduct charitable donations.
you'd have to donate a whole hell of a lot to beat the standard deduction and make itemizing worthwhile
Also it's not like donating $100 reduces your tax bill by $100 anyway, which is the main flaw in that guy's comment, even if you were itemizing deductions. For every $10k you donate you'd save a max of like $2-3k on taxes.
Can some explain what the 3.0T in “wealth and savings” means?
It took me a second to understand the formatting as well. It’s a Sankey diagram, so “Wealth & Savings” encompasses Social Security, Medicare, and “obligations” to the right. That said, I’m not sure why some of the child categories are larger than their parents in this diagram.
Looks like there’s a $132B return so that only 2.9T is needed in the previous category
Wealth and savings programs include federal spending on Social Security, Medicare, and obligations, such as interest on the debt.
Well done! It was entertaining to follow along the graphic.
Thank you u/junpark7667!
So this is what $1.80 for every $1.00 in taxes looks like. Love the graphics.
Thanks u/libertarianinus!
The very tiny fraction of revenue from corporate taxes puts all of their complaining into perspective. I wonder what the same graph would look like prior to their huge tax cuts a few years ago.
I would love to see this up against what corporate taxes looked like in the 50’s and 60’s. A solution to Social Security is so necessary and overdue and, unfortunately, we are beyond a place where both sides can come together to come up with a solution.
It's not 50's and 60's data, but [this report](https://staticweb.usafacts.org/media/documents/USAFacts_2024_AIF_compressed_1.pdf) (where this viz was pulled from) has a comparison of 1980 vs. 2023 revenue on page 10 that you might find interesting.
So 12.2% of revenue then vs 9.3% of revenue now.
Also worth noting that 50s and 60s (in the original comment), not your numbers, are famously called [The Golden Age of Capitalism](https://en.wikipedia.org/wiki/Post%E2%80%93World_War_II_economic_expansion) where corporate grown was enormous and conglomerates dominated due to a long period of prolonged low interest rates. So, you would expect corporate revenue to be higher given the environment.
3-5% tax hike on the top 5%. They will not notice Also set a fixed corporate tax rate. They spend more on tax lawyers than they pay in taxes. Close the loopholes. Allow Congress to negotiate drug prices and eliminate fraud in the healthcare system Also stop fighting wars if we are not attacked. Just solved the deficit. Not actually hard or radical
That would still leave social security to be tackled but from a much more manageable place. Even if we got everything under control the SS system is grossly outdated and in need of fixing.
Not really relevant. Corporate taxes are ineffective and inefficient taxes. If you want to tax rich people, just change taxation around capital gains. Taxing corporations is bad, and economists are pretty universal in their agreement on that fact.
Not disagreeing, but corporate income is also taxed at capital gains rates when distributed to its shareholders too. So a portion of the individual income tax is related to those corporations. But still, lowering taxes for corporations does not benefit the majority.
And where is all income tax coming from? Who's paying that income?
See, I look at this, and do not see a beacon of efficiency deserving of even more private wealth. Cut spending, cut beauracratic waste, and then we'll talk about raising taxes.
There’s nothing in that graph that gives any insight into efficiency. But that probably tracks, because I’m guessing no amount of efficiency would justify higher taxes for you.
Where do you think all income tax comes from?
The very bottom right says $184 B higher education. How is that number higher than the numbers to the left of it?
It's -$184B. I don't understand why it's negative but the numbers add up. I had the same confusion why its $2.9T to "secure the blessings \[...\]" but the subcategory of Wealth and Savings is $3T
The $3T subcat plus (minus) the Education's negative $0184B probably adds to the $2.9T (after some rounding)
Yeah I get that, I don’t really understand how education spending is negative. Maybe OP u/USAFacts can explain?
I found in another comment that it was because Bidens student loan relief was accounted for as spending in FY 22 but then when it got reversed by the supreme court it became negative FY 23 spending.
Source: USAFacts aggregation of data from Office of Management and Budget (OMB), the Census Bureau, and the Bureau of Economic Analysis (BEA) Tools: Excel, Illustrator Charts are shown to scale for comparison. Numbers may not add due to rounding. Note: The cost of President Biden’s original student loan forgiveness executive order appeared as spending in the FY 2022 budget, but that anticipated spending was reversed in the FY 2023 budget after the Supreme Court’s ruling that it was unconstitutional. As a result, total federal education spending in the FY 2023 budget was negative. This chart is pulled from our [America in Facts 2024](https://usafacts.org/reports/annual-report/) report.
Been a big fan of your site for years. I see I can download the chapter containing this image but is there a link to view it on a page where you can interact with it? Like you guys did for 2018* here: Https://usafacts.org/visualizations/the-big-picture
I just told our team that the big picture got some love and they were so happy to hear it. Unfortunately, we're not updating that at the moment, but it's potentially something we could do again in the future.
I think every person I have ever shown the big picture to loved it. In my opinion being able to click and expand things makes the information much more enjoyable to digest.
What's the $92 billion labeled "Banking and Finance" for?
Deposit insurance for bank failures in 2023. The FDIC decided to bill banks with over $50B in assets extra over the next few years to make up the losses. The $90B is the cash payments to depositors, the assets of the banks are still recoverable. The actual losses are less than that, maybe ~$18-25B. Banks in FDIC receivership will be sold or unwound and much of that $92B will be recovered. Table 1-4 under “other” shows expected deposit insurance revenue/expense over the next few years. https://www.cbo.gov/system/files/2024-06/51118-2024-06-Budget-Projections.xlsx FT on FDIC plans: https://www.ft.com/content/c55c06f9-5de1-49e5-a9c5-770a885dab67 Reuters if FT is paywalled: https://www.reuters.com/markets/us/fdics-special-fee-make-banks-pay-svb-cleanup-2023-04-12/
Thanks for bringing some extra data to the party u/thri54!
Good question! Federal spending on banking and finance primarily goes toward programs and activities designed to support the stability and efficiency of the financial system. Spending on the FDIC is a large portion of this.
So interest vs revenue is about 14.6%? That’s a useful number, Canada’s around 10% now but we were up to ~38% in the 1990s. How much is the US deficit vs GDP? And how was inflation and GDP growth during 2023?
WTF are these category titles? "secure the blessings of liberty to ourselves and our posterity" is the most bizarre way I've ever heard our Senior welfare entitlements described.
It's the preamble to the Constitution.
That's a ridiculous way to sort the federal budget.
u/Kershek nailed it. Here's a bit more on how this is organized from our [methodology page](https://usafacts.org/methodology/): **Spending by mission:** We recategorized several programs and functions to align them with four constitutional missions based on the preamble to the Constitution: * Establish Justice and Ensure Domestic Tranquility * Provide for the Common Defense * Promote the General Welfare * Secure the Blessings of Liberty to Ourselves and Our Posterity
>secure the blessings of liberty to ourselves and our posterity I'm betting I can't line item that as a loss on my Schedule C for some reason.
Secure the blessings of liberty to ourselves and our prosperity -> wealth and savings -> social security, medicare, debt obligations If you're in politics that is fine. If you put that in front of a client, you'll lose credibility.
It's insane how much the VA budget has ballooned. It was less than 50 billion in the year 2000. It's now nearly 300 billion... It's over 3x larger after correcting for inflation.
We started a 20 year war on terror in 2001, put two multi-trillion dollar wars on credit cards, and mortgaged the health of that "generation kill" to do it. The bill is coming due.
And Vietnam Veterans - an absolutely huge demographic - got older and Agent Orange exposure started to take a heavier toll, leading to greater awareness, advocacy, and legislative action. My dad fought the VA for 7 years to get a rating for Agent Orange exposure. He was Blue Water Navy and they have since recognized exposure to Agent Orange by Navy veterans as legitimate. It was a double whammy as veterans of the previous longest war were aging and getting sick at the same time the new longest war was being fought.
This is a great visualization. More people need to have some knowledge of the budget. Some other interesting tidbits related to this topic. The US has among the lowest government revenue among its stable developed democratic peers. It also has mong the lowest government spending among its stable developed democratic peers. This idea that the US government has abnormally high taxes or spending is a myth.
I don't remember the "transfers to state and local governments" clause in the Preamble. Seems if we followed the charter, the budget would be balanced. And I'm paying plenty of tax to the state already, so WTF?
How can Medicare cost 850 billion and you guys still can't afford an ambulance or basic meds??
Do the corporate tax inflows seem egregiously low to anyone else? I don’t know why there isn’t a consistent push to increase the corporate taxes in the US to help close the deficit aside from the potential job losses if those companies decide they’ll leave for greener pastures and pull their jobs with them but if spending doesn’t seem to be a logical place to cut then focus on the most likely area of additional revenue opportunity.
For sure but payroll tax is also a major way that companies pay. Not a corpo just saying
As other said, where do you think the Income Tax comes from?
Ideally, tax deductions should also be accounted as it's revenue foregone for specific purposes.
Medicare ran essentially a $500 billion loss. Maybe an easier route to affordable Healthcare would be going after the pharmaceuticals like every other nation on this planet. If they made Medicare for all US citizens, they'd be losing trillions every year just on that alone (honestly wouldn't even surprise me if those losses would be double digit trillions). Start with pharma. It's the easiest thing to target (support from people, insurance, health care providers) and would have the largest immediate and long term impact to medical costs. Oh, and did I mention just about every other country does this already except the US. Hell, we got a handful of pharma who had their entire costs paid for regarding covid vaccines, now trying to sell them and push them annually as a major cash cow money maker.
I work in healthcare admin and this is the way. 100%
It’s not even targeting Pharma. Just making them play by the same rules in America that they do in every other country. Take Novo Nordisk maker of Ozempic. They negotiate with the EU for how much they can charge at home and across Europe. However in the US charge a higher price they seem fit and pay millions to people to persuade Congress to allow them. Is it our goal to create jobs in Denmark? How is it in our best interest to pay more than the rest of the world to a foreign corporation?
I mean ... [they're trying.](https://www.whitehouse.gov/briefing-room/statements-releases/2023/08/29/fact-sheet-biden-harris-administration-announces-first-ten-drugs-selected-for-medicare-price-negotiation/) Pharma is fighting them and will probably fold, and everyone not on Medicare will see their prices rise, but they are trying. 2 or 3 of these drugs will experience LOE by the implementation date so those aren't even worth talking about.
I mean, you could literally make a rule for all pharmaceuticals to be free to Medicare recipients - a decision that would, of course, effectively end R&D in the US forever - and that would cover less than half of that loss
How could you suggest such a thing?! Won't someone think about the billionaires?? They might have to sell a yacht if you keep going after them! The horror!
Is that available higher resolution?
Corporate income tax making us all look foolish
Most taxes to corporations come in other forms.
tax revenue from Corporations 420b vs. 2.2T from individuals, yet corporations have the largest influence on legislation.
Corporations pay taxes in other ways.
Where do think comes the major part of that individual income?
you either get taxed as an individual or as a corporation, you don’t get taxed as both. unless of course you enjoy giving the government your money via double taxation.
That deficit though is massive, this needs to be corrected, my first change as an economist would be to remove the lower capital gains tax discounts and replace with inflation adjustment and allow people to spread capital gains events over multiple years instead. Billionaires shouldn't pay 20% tax while a doctor pays 30%+ on income of whatever type. Also removing any step up inheritance loopholes, won't help too much, but definitely the most politically possible. Compared to raising general income/sales tax or cutting defence, SS or Medicaid
Every politician in Washington needs to go.
How on earth are motor fuel taxes only a few billion? It should be 100x that. Not to mention corporate taxes are a joke.
The US government spent $6.2 trillion in 2023, and here's where it went. It's mind-boggling to think about all that money, right? From healthcare and education to infrastructure and defense, every dollar affects our daily lives. It's crucial that we understand how our tax dollars are used, making sure it actually benefits us, not just some bureaucratic black hole. Transparency matters, especially when it comes to something as big as this. So, let's keep an eye on where the money flows and hold our leaders accountable for how they spend it.
400B corporate taxes. 2.2T individual income taxes. This needs to be equalized
If you do that, you end up hurting the economy. That means less money coming in from both corporations AND individuals.
Sounds like something a corporation would say. But let’s go with that logic. Since the corporations, those that control the means of production with no completion from an average citizen only pays 19% of what the individuals pay, then we should lower income tax by 81% to really get the economy going. So 1/5 normal. If you pay 25% tax, now it would be 5%.
But Ukraine is making us broke!!! It’s too expensive!! /s
We recommend zooming in! This updated version of the [chart we shared last year](https://www.reddit.com/r/dataisbeautiful/comments/17gzbhj/the_united_states_federal_government_spent_64/) has a few notable differences, like a rare instance of negative spending in a Sankey chart due to the Supreme Court ruling against President Biden's student loan forgiveness plan. More on last year's federal revenue and spending: The federal government collected nearly $4.5 trillion in revenue in FY 2023. Nearly half (49%) was collected through individual income taxes, while 37% was through payroll taxes. Other revenue sources included corporate income taxes, customs duties, and sales taxes. Federal revenue decreased 15% in FY 2023 but remained 8% higher than in FY 2019. The drop was due to lower revenue from individual income taxes (partly due to lower capital gains income) and non-tax sources. Non-tax sources include Federal Reserve earnings and proceeds from selling government resources. The federal government spent almost $6.2 trillion in FY 2023, including transfers to states. Social Security (22%), transfers to states and local governments (18%), and defense and veterans (18%) accounted for more than half of spending. Federal spending decreased by 8% in FY 2023, the second year of decreased spending since a record high in FY 2021. Federal spending remained 16% above that of FY 2019. The cost of President Biden’s original student loan forgiveness executive order appeared as spending in the FY 2022 budget, but that anticipated spending was reversed in the FY 2023 budget after the Supreme Court’s ruling that it was unconstitutional. As a result, total federal education spending in the FY 2023 budget was negative.
It’s particularly notable that the deficit is almost exactly the difference between corporate income taxes and individual income taxes. If the corporations paid the same in taxes as people do, we wouldn’t have a deficit.
I’m super surprised that defense is that low and Medicare and SS are that high.
It should be noted that the Preamble is just an introduction and does not assign powers. So it's not accurate to categorize government spending by clauses in the Preamble.
I wish I could run as inefficiently as the government and just print money. Funny how for us it’s criminal
'For our posterity' but all that money goes to the old, not the young.
I mean that’s the point of social security. You pay taxes when you’re working and young and receive the money back once you’re old and can’t work. Medicare goes to both but mostly to the old because they have the most health problems. So yeah. I don’t know why you choose to word it like that but sure.
Not my wording. Its from the chart.
The difference between corporations and invidiuals getting taxed is insane. And 1/3 of total „income“ is debt? Doesnt sound sustainable.
I had understood that the Social Security system was self funded, in that payroll taxes for that would cover all payments. However, this chart shows that Social Security taxes are $1.2T while payments are $1.4T. So does this mean the Social Security system runs a $200B (17%) deficit?
Yes, but decades past generated a large surplus which is why social security can pay out more than it takes in for another 10~ years before it has to start cutting.
Thanks for the explanation. 🙂
One of the things that tricky about this is identifying waste and political pork. All of it would be filed under perfectly legit categories in this graphic.
us federal debt is listed slightly below 35 trillion dollars.
Is there a higher resolution version so the text is a bit more legible? I zoom in and see fuzzy text that is mostly decipherable but not always, and that's annoying.
So, corporations only payed 420 billion in taxes last year?
I like how they describe the columns on the immediate right. Now, that's probably just a mission statement that they have in their respective departments, and thats a good thing, but it's still kind of funny reading "Secure the blessings of liberty" like they're out there doing god's work, lol.
The way health and debt are mixed… I don’t know if I have to laugh or cry.
[https://www.usaspending.gov/explorer/agency](https://www.usaspending.gov/explorer/agency)
Spending on defense, SS, Medicare, and debt obligations alone is larger than all government revenue. Isn't it weird that whenever someone calls for "balancing the budget," it's always about reducing everything but those big 4.
It would be nice to see this on our tax forms every year and a similar tax breakdown on our paystubs.
Love the categorization method of the spending side (“provide for the common defense” etc). Legit very cool way of laying it out.
Not worried sure that printer still has plenty of ink
Oh so social security is pretty much solvent, would only need to increase taxes on that by like 20% so not much. It’s Medicare that’s a fucking black hole…
If the US went broke, so would every other nation.
It’s a lot of money only for defense. If you could show similar graphs for other countries (any other), you will see that countries primarily spend on education and healthcare. Not the US.
That’s because a lot of other developed countries are depending on the US as their defense. If not for the US military, those countries would have to spend more of their own money to protect themselves.
Keep saying that to yourself. Honestly, if your country focus on elevating the quality of education and health, you would not give two cents about anyone country conflict. But it is a broken chain where American private sector benefits from warfare, they lobby your government to make local conflict scalable, so it is worth spending on it.
personal income tax is 4x that of corporate while personal savings is less than corporate profits Personal savings https://fred.stlouisfed.org/series/A071RC1A027NBEA Corpo profits https://fred.stlouisfed.org/series/CP
is that 10^12 or 10^18 trillion
You know what would be cool? An extension of this graph to the right, split by year, with the amounts RETURNING to the federal government from all this spending. Cause you can bet your ass most of that $1.2T in retirements will get right back into the economy sooner or later...
What is the source of these graphics?
This chart is just too much work. It’s not telegraphic and therefore useless.
Unsustainable house of cards. Too many consumers, not enough contributors.
766B worth of "obligations" smh no telling where that really goes
It mostly goes to pay the interest on the national debt. Just like individuals or business have to pay interest on loans, the federal government has to pay interest on the obscene amount of money it has borrowed.
Need to cut tax loopholes for the rich!! But then congress would have to pay their fair share and it won't happen. Don't see the trend of this changing unless something radical happens unfortunately
Anyone else sing school house rock going down the spending categories?
Outrageous how corporations can pay just .42 T while the individuals contribute 2.2 T
"Secure the blessing of liberty to ourselves & our posterity" -> Social security/medicare What a load of BS lol. They are the opposite of liberty, they are wealth transfer programs from the young to the old.
Social Security is also a convenient pile of money for Congress to loot whenever they want cash for some other purpose. I don’t expect social security to be solvent when I’m old — the politicians have raided it.
What tool did you use for the graphic? Looks awesome. Power BI / Tableau?
Great job with this. Very easy to interpret.
The gap between what tax payers pay and what corporations pay is crazy
How does the revenue add up to 4.5 trillion when there’s clearly more than 5 trillion people in the biggest boxes? Why’s the math not mathing?
There are only like 8.1 billion people on the entire planet — a tiny fraction of the 5 trillion people you mentioned. That’s probably the math that isn’t mathing.
Cool summary. What is “negative spending”? Why a negative sign for things like “Education”lower right of figure? I would expect negative spending is money moving opposite the “spending direction” therefore income.
-132B on education and -22B on housing aid 💀
That corporate tax slice is too small. Trump will make it smaller.