Based on information I received from the Office of Management and Budget I have revised this post. The numbers changed by enough that I though it worth revising.
I have been involved in some discussion of late regarding fairness of our tax system, income distribution, and income redistribution. It seemed to me that there was a lot missing in these discussions. In particular, the facts! So I set out to plow through some government reports to get a handle on were the money comes from and where it goes. This has turned out to be quite a challenge, especially since I am not an accountant (although I think even some accountants would be baffled by some of this stuff).
As I progressed it became obvious to me that this is a project that will need to be broken down into pieces. I decided the first piece would be welfare related expenditures because that has been a popular topic in my conversations and political debates. With that introduction, here are some of the welfare figures. I hope to have more analysis soon, depending upon when one very nice young intern named Karl at the Office of Management and Budget gets back to me with some information. (Karl has since gotten back to me which is why this has been revised. Thank you Karl!)
According to The Budget for Fiscal Year 2008, Historical Tables, total outlays for Means Tested Entitlements in 2006 were $354.3 billion. This was 2.7% of GDP and
Includes Medicaid, food stamps, family support assistance (AFDC), supplemental security income (SSI), child nutrition programs, refundable portions of earned income tax credits (EITC and HITC) and child tax credit, welfare contingency fund, child care entitlement to States, temporary assistance to needy families, foster care and adoption assistance, State children's health insurance and veterans pensions.
(from Table 8.1, page 133)
The cost of these programs has increased from 0.8% of GDP in 1962 (before Medicaid) to 2.7% of GDP in 2006, or by 1.9% of GDP. If we exclude Medicaid, health care for children and veterans pensions it is 0.89 % of GDP, or $117 billion. (The numbers for the excluded items are found in Table 8.5, page 142). This represents approximately 7.5% of total non-Social Security receipts to the Federal Government. So, for every one of your tax dollars to the Federal Government, about 7.5 cents goes to these programs. I hate to use averages, but the average taxpayer had a tax rate of 12.45% in 2005 (the latest data available here), so if we multiply things out we see that about 0.93% of the average taxpayer's income went to non-medical "welfare". So, if you made $50,000 and paid $6,225.00 in Federal income tax, approximately $465.00 went to all of these programs x-healthcare and veterans pensions.
Next up I hope to isolate some of the health care numbers. I believe this is truly where our fiscal crisis lies and I hope to see whether I am correct. It will require working through historical budget numbers together with Social Security numbers - my head hurts already!
OK, for Social Security go here.
For helth care go here.
For the rest of the budget go here.
So, if you made $50,000 and paid $6,225.00 in Federal income tax, approximately $465.00 went to all of these programs x-healthcare and veterans pensions.
So ... for about the cost of one large drip coffee per week ... the average taxpayer making $50K invested in:
Food stamps, family support assistance (AFDC), supplemental security income (SSI), child nutrition programs, refundable portions of earned income tax credits (EITC and HITC) and child tax credit, welfare contingency fund, child care entitlement to States, temporary assistance to needy families, foster care and adoption assistance
Seems like a damn good investment, to me. And it's less than tithing (which would be $5K, IIRC)
Get a job. There are very few people who cannot truly work in any capacity. Why should I give someone $20 dollars to sit on the couch and watch Springer (most of them have satellite dishes that I can't afford) when you could be cleaning graffiti or helping to build a road or a park, or even answering phones for gov't agencies from your home if you're disabled. Why throw money away and not get anything for it. That's not how I receive my money. I have to do something for my employer when I'd rather be home with my family.
welfare for the supposed poor, sick or needy, yes.
welfare for the rpblicans, no (they always want more and more and more = look at the governments budget figures for the 8 years before the plant and for the 8 years since 2000.
went for doing really very good, in the green, to more in the red than ever before, and all for lies. at least that's what the governments own budget charts show clearly.
i agree with the fact that yea they should cut off welfrae to those who has been on welfare for over 2 years. some of these are young parents who just refuses to work cause they can sit home and watch springer while getting free cash from us hard workers. i hate the fact that my tax dollars goes to these lazy people. granted some of these people actually need the help and i have no problem with that as long as they get a job or attempt to get of welfare and better themselves. welfare is suppose to be temporary. after 1 year of no job the government should find out why some of them dont have jobs ect.....1 to 2 years of being on welfare is long enough. i have to get up at 400am to work all day and bust my butt to support my family. to hear about people being on welfare for years cause of laziness just sickens me. our public safety officials are loosing their jobs and the rest of us hard workers worry about what if i lose my job while welfare recipients sit home all cozy and comfortable and never have to worry about losing their jobs (oh wait they dont have a job).why work when u can get free money. man im gonna quit my job so i can be on welfare and sit home all day long getting fat and even more lazy. show me the free money,our wonderful government. just so most of you people know i went to iraq 3 times to make sure my family had a roof over their heads, clothes on their backs, food, and a wonderful home they can come home to after school. see what hard work does for you lazy ass people. i apologize to the people who actually needs welfare. these comments are for those lazy ass welfare recipients who just refuses to work. and theyre alot of you out there. my advise get a job and contribute to our society.
These are some interesting figures. But they are incomplete. You also need to include the bureaucratic costs of administering all of these programs, all across the United States. What does it cost for the office spaces and the utilities, the administrative staff, (salaries) benefits, and retirement), etc... It seems that some have created their own aristocratic lifestyle banging the drum for the "have nots". It is not an issue of whether we should give to the needy. Rather, the issue is how much gets lost between the giver (the tax payer) and the recipient (the needy) because of the number of bureaucratic hands that it passes through. The administers of these programs are making hundreds of thousands of dollars in wages, benefits and retirement.
Often it seems that the ones shouting the loudest for the needy, give the least from their own pockets to charitable causes. Maybe thats because they don't feel that they need to give, because they feel that it is the Governments job.
But the bigger issue is the notion that we just need to take from the wealthiest to spread around the wealth. If we adopt that mindset, then on what basis to we protest when the UN thinks there needs to be a global tax on the wealthiest world citizens to pay the "have nots" of the world. (This has already been proposed.) In that case, America's poorest are weathy compared to many Hatians or Africans. America's poor would be called upon to share their 'wealth', that which they had given to them, they would need to give to benefit the world's underpriveledged. Pretty ironic.
The real issue is how to give to those who have real needs, and help them move to a place of independence, where they also become a contributing member of our society, in the most efficient and effective manner possible. This would mean finding ways where a greater percentage of what is given actually ends up in the hands of the needy, without many "middle men" getting rich because the money passes through their hands. I don't think the government is the best way to do this.
Another question is how much is lost in just paying interest on our national debt? I personally can't afford any of my money going out for interest, so I avoid debt. I took out a home mortgage because I knew that I would pay the same amount in rent. But I can see that hundreds of dollars a month go out for interest in that one payment. Can you imagine what would happen if we could have all the money that is now going out just to pay the interest on the national debt?
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We're not talking about administering the Pentagon here. Administrative costs for these programs are minimal compared to administrative costs of other programs and government spending as a whole. You may have to add a few dollars to the $465 a year figure. Besides, these programs create American jobs.
The government is never "the best way" to do anything. But not funding these programs is not a solution. I for one, recognize the high standard of living and earning opportunity this great country gives me. If I have to pay a few hundred dollars in taxes every year to make sure millions of Americans avoid poverty, I'm happy to do it.
What we really need to look at as a country is our spending on defense, social security, and healthcare. And, as you mentioned, national debt. We can save significantly more money in these areas than we ever could by reducing spending on "Income Security" programs.
Well, less than or about 1% financially isn't all that much...
Think and look into how much more most pay for MEDICCAL ! (10% r more?!)... in the u.s.a....
In eurpe, the cure for luekmia is legal for doctors to use and costs about $5000 total, usually works.
In u.s.a., the cure is not allowed. The toxic trmnt used cost 100000or more and usually fails.
Why ? .... hint:greed... the druglords answer this way QUOTE "It (the proven cure) can't be patented"
Surprised? maybe you are, but don't be ongoing stupd... gooodle "cottage cheese flax" to start to C.
Thanks for the link to this article. I have been shouting for a while that our social aid progam is not a philanthropic endeavor but is for the betterment of society as a whole.
This being the case, why are there so many ALIENS drawing welfare? They draw CRAZY MONEY & welfare before the mother has been in the U.S.A. for a year. No wonder the country is going down the tubes. REX
VVVVVVVVVVVVVVVV
welfare law: an overview
In the United States, welfare benefits for individuals and families with no or low income had been almost non-existent prior to the Great Depression of the 1930s. With millions of people unemployed, the federal government saw income security as a national problem. In addition to establishing two major "social insurance" programs to respond to future income loss (Social Security and Unemployment compensation), the Social Security Act of 1935 launched federal grants to support state welfare programs for low-income elderly and families with children. The former evolved into a federally administered program for the elderly, blind, and disabled, Supplemental Security Income (SSI). The latter became Aid to Families with Dependent Children (AFDC). Both were supplemented by two important "in kind"benefit programs also funded by the federal government -- Medicaid and Food Stamps. Needy individuals not meeting the eligibility criteria for these forms of federally assisted or supported welfare may qualify for purely state or state and local relief, often called general assistance.
In 1996, Congress passed the Personal Responsibility and Work Opportunity Reconciliation Act (Welfare Reform Act). The new law eliminated AFDC, placed permanent ceilings on the amount of federal funding for welfare, and gave each state a block grant of money to help run its welfare program. For example, under the 1996 law, federal funds may only be used to provide a total of five years of aid in a lifetime of a family. Another significant change was the complete exclusion of legal aliens from receiving any SSI benefits. The passage of the Contract with America Advancement Act of 1996 further narrowed the number of people allowed to receive SSI disability benefits by requiring that drug addiction or alcoholism not be a material factor in their disability. HOW ABOUT SMOKING?
Do U think if a book were written, that this Info. would get more exposure? REX
Yes. I am in the process of writing a book on the subject. My point will be that we are throwing too much money at the result of the problem instead of the cause. For example, we are spending over 40 billion a year on incarceration costs of running federal and state prisons. Don't even count the cost of running juvenile detention centers, probation officers, courts, etc. Too many prisoners who are released go back into the same associations and environments, so they wind up back in prison. Too many prisoners are uneducated, having dropped out of school early in their lives. They can't find a job, so resort to crime again.
We need to spend money at the front end - crime prevention. That means punishing teenage girls who have babies they can't nurture, can't support, can't educate, and can't discipline. The young family invariably winds up on welfare. These girls should be confined when they are determined to be pregnant, and given an education on nurturing and raising a child from infancy. The so-called irresponsible fathers should be identified and put into detention where they should receive academic and physical education to learn a trade, be physically fit, get back into the school system, and go on to higher education and more responsibility. (See "First things first." ) This is where they talk about how important it is for a newborn to start learning when its brain cells are like sponges. Why not take mothers off of welfare and pay them a monthly stipend (pay) for educating their infant to age five in the home? No child care expenses to worry about; no transportation expense to get to work. They can be furnished with special software and DVD's already available that take the infant all the way to reading and ready for kindergarden where the teachers can then concentrate on education and socialization instead of disciplining that should have been done at home.
We also have to stop shooting ourselves in the foot with our reckless health habits like overeating to the point of obesity, poor diet regimen, little or no exercise, careless habits like driving and text messaging while driving, alcoholism, drug addiction (60% of incarcerated people are there because of drug related offenses - dealing, using, stealing, etc.) Do you have any idea how much medicare fraud is going on? Very often physician's assistants use the same code number as physicians when billing medicare. So they get paid at high rates per hour from which the doctor extracts something and he/she pays the assistant the normal rate. Likewise, doctors are forced to practice and unproductive form of preventative medicine - meaning ordering more tests than necessary in order to avoid malpractice law suits without monetary caps on damages, which means lawyers are getting a piece of the action. We could knock our health costs from 2.3 trillion to 1 trillion per year. That's a lot of bucks that could be spent in education at the earliest stages of life.
Mothers training their kids at home and receiving a stipend would get routine, random visits from people like Head Start personnel who would check on the child's progress and the mother's use of the computer (furnished free) which can print out what lessons have been completed and retest in the presence of the monitoring person to keep the parent from having answered the test questions. Also snips of hair would be taken from the mother to test for drug use. That's it for now. Stay tuned. H Pappas
Did my newsvine post get transmitted automatically to Google following the "OOPS" notice? Or do I have to repost on the newsvine again? Or do I have to post my entire comment directly to Google? What a bummer. Harry Pappas ()
It just goes to show that welfare has never been a major cost in this country. If less than
1% of the average paycheck goes for non-medical welfare, it isn't causing our economic
problems, and it never was.
oh wait i forgot one more thing. at the end of the year when we all file taxes some of us will have to pay back and what not. its pretty sad that welfare recipients dont have to work and at the end of the year when they file for taxes get get even more money. last time i checked welfare recipients where using our tax dollars to sit home all day. why in gods name should they get back money when they file for taxes. i think the way it should work is when u work you get money back. you collect free money u get nothing back. its just simple and our wonderful country can get some money saved to pay off our huge deficeit we got going on. think trillions of dollars. matter of fact welfare recpients should pay back at the end of the year, to repay some of the free money they got. oh and enjoy the free healthcare while im paying an arm and a leg so i dont get penalized 1500 dollars at tax time from my wonderful state. sheriff joe arpaio in arizona who runs the prison system is my hero. check him out on the web. he should run every prison system in the usa.
Executive Summary: While many studies answer the question of who pays taxes in America, the question of who gets the most government spending is often overlooked. Just as some Americans bear a larger portion of the nation's tax burden than others, some Americans also receive a larger share of the nation's government spending.
This report summarizes the key findings of a comprehensive 2007 Tax Foundation study of federal, state and local taxes and government spending. The results show that when we consider the distribution of government spending as well as taxes, it provides a dramatically altered view of how U.S. fiscal policy affects Americans at different income levels than is apparent from the distribution of tax burdens alone.
Overall, we find that America's lowest-earning one-fifth of households received roughly $8.21 in government spending for each dollar of taxes paid in 2004. Households with middle-incomes received $1.30 per tax dollar, and America's highest-earning households received $0.41. Government spending targeted at the lowest-earning 60 percent of U.S. households is larger than what they paid in federal, state and local taxes. In 2004, between $1.03 trillion and $1.53 trillion was redistributed downward from the two highest income quintiles to the three lowest income quintiles through government taxes and spending policy.
These findings suggest tax distributions alone do not tell Americans how much the nation's fiscal system is helping or hurting low-income households. To answer that, we must look beyond tax burdens to government spending as well. Lawmakers who ignore the distribution of govern-ment spending risk making policy judgments based on an incorrect set of facts about the United States fiscal system.
The Top 50% pay 96.54% of All Income Taxes
(The top 1% pay more than a third: 34.27%)
October 4, 2005
This is the data for calendar year 2003 just released in October 2005 by the Internal Revenue Service. The share of total income taxes paid by the top 1% of wage earners rose to 34.27% from 33.71% in 2002. Their income share (not just wages) rose from 16.12% to 16.77%. However, their average tax rate actually dropped from 27.25% down to 24.31%
*Data covers calendar year 2003, not fiscal year 2003
- and includes all income, not just wages, excluding Social Security
Think of it this way: less than 3-1/2 dollars out of every $100 paid in income taxes in the United States is paid by someone in the bottom 50% of wage earners. Are the top half millionaires? Noooo, more like "thousandaires." The top 50% were those individuals or couples filing jointly who earned $29,019 and up in 2003. (The top 1% earned $295,495-plus.) Americans who want to are continuing to improve their lives, and those who don't want to, aren't. Here are the wage earners in each category and the percentages they pay:
The top 1% pay over a third, 34.27% of all income taxes. (Up from 2003: 33.71%) The top 5% pay 54.36% of all income taxes (Up from 2002: 53.80%). The top 10% pay 65.84% (Up from 2002: 65.73%). The top 25% pay 83.88% (Down from 2002: 83.90%). The top 50% pay 96.54% (Up from 2002: 96.50%). The bottom 50%? They pay a paltry 3.46% of all income taxes (Down from 2002: 3.50%). The top 1% is paying nearly ten times the federal income taxes than the bottom 50%! And who earns what? The top 1% earns 16.77% of all income (2002: 16.12%). The top 5% earns 31.18% of all the income (2002: 30.55%). The top 10% earns 42.36% of all the income (2002: 41.77%); the top 25% earns 64.86% of all the income (2002: 64.37%) , and the top 50% earns 86.01% (2002: 85.77%) of all the income.
I have made an executive decision as the owner and ultimate editor of this website that this table and these numbers stay on this website forever - updated when each year's numbers come out, of course. In order to get these facts, you have to see them each and every day.
The Rich Earned Their Dough, They Didn't Inherit It (Except Ted Kennedy)
October 10, 2003
The bottom 50% is paying a tiny bit of the taxes, so you can't give them much of a tax cut by definition. Yet these are the people to whom the Democrats claim to want to give tax cuts. Remember this the next time you hear the "tax cuts for the rich" business. Understand that the so-called rich are about the only ones paying taxes anymore.
I had a conversation with a woman who identified herself as Misty on Wednesday. She claimed to be an accountant, yet she seemed unaware of the Alternative Minimum Tax, which now ensures that everyone pays some taxes. AP reports that the AMT, "designed in 1969 to ensure 155 wealthy people paid some tax," will hit "about 2.6 million of us this year and 36 million by 2010." That's because the tax isn't indexed for inflation! If your salary today would've made you mega-rich in '69, that's how you're taxed.
Misty tried the old line that all wealth is inherited. Not true. John Weicher, as a senior fellow at the Hudson Institute and a visiting scholar at the Federal Reserve Bank, wrote in his February 13, 1997 Washington Post Op-Ed, "Most of the rich have earned their wealth... Looking at the Fortune 400, quite a few even of the very richest people came from a standing start, while others inherited a small business and turned it into a giant corporation." What's happening here is not that "the rich are getting richer and the poor are getting poorer." The numbers prove it.
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