As the old saying goes, there are only two things in life that are guaranteed: Death and taxes! Perhaps, that's true, but where does all that money go? Let's find out.
Where's My Money?
Every year, hundreds of millions of Americans file their tax returns with the Internal Revenue Service (IRS) without really knowing where their tax dollars go. According to the Tax Foundation in Washington, D.C., 23 cents of every federal tax dollar is allocated to Social Security; 20 cents is earmarked for health and medical services; 16 cents is set aside for the national defense; and 14 cents is designated for net interest payments on the federal debt. The remainder of monies from every federal tax dollar is earmarked for income security, transportation, education, veterans' benefits services, education and training, and other services.
In an eight-hour workday, the average worker spends two hours and 51 minutes paying for federal taxes, according to the Tax Foundation. About 35 percent of an individual's gross income is taken for taxes. For example, if you're making $36,000 a year, you will pay Uncle Sam $12,600 in taxes, which equates to $242.31 a week.
Of that $12,600 in annual taxes, $2,898 goes toward social security; $2,520 for health and medical services; $2,016 for the national defense; $1,764 for net interest payments on the federal debt; $1,827 in income security; and, $1,575 for transportation, education and training, veterans' benefits services and other services.