Tuesday, February 26, 2008

Where your taxes are going in the 2008 Federal Budget

Have you had a chance to see the new budget for this year? Just like any business or household, the government has a budget, a plan for the future. This one is kind of different from other spending plans in that the government actually expects to exceed the budget. Consequently, the deficit is built right in.

The following graphic depicts the total outlays (expenses) and receipts (collections) for the 2008 federal budget. This graphic is a portion of the total budget graph which you can find here, called Death and Taxes. Although it does not compare to Napoleons’ March, which is my all-time favorite graph, Death and Taxes, does have a ton of data compiled into one visual illustration that is pretty amazing.

The data for the chart is from the president’s 2008 budget request that is yet to be debated and approved by Congress. The size of each circle is in proportion to the amount of funds allocated to that item. Also note that the percentage change from 2007 is included (in green/red type).

It’s humbling to realize that if you pay taxes then you have paid for a small part of every expense on this chart. What this chart provides more than anything is a glimpse at our national priorities. These expense items depict what are considered the most important programs for this country. Obviously, national defense is very critical coming in at #1 (biggest circle) at 717 billion. Next up, we are taking care of the disabled and retired/elderly with social security as a key priority – the amount of this one always astounds me. A distant third is Medicare. Notice that each of the top three got substantial increases for 2008.

It’s good to see that we are actually adding more funds, a 9% increase, to whittle away at our national debt. Too bad we are also going to run another deficit this year – kind of hard to ever get ahead when you keep spending more than you take in! The good news is that the deficit for 2008 is currently predicted to be less than last year by 2%. Way to tighten the belt, George.

Moving on to the income side of the graphic, we see that the primary breadwinner for this budget is the individual taxpayer. All of us together pay over four times what corporations pay in tax. And it appears that trend is going to continue as income taxes are expected to increase by 7% while corporation taxes will decrease by 8%. The second biggest income generator is social insurance, which is currently bringing in a lot more than it’s paying out for social security. That’s very reassuring, but, as we have all been warned that is bound to change with the boomers retiring soon.

Again, be sure to take a look at the overall Death and Taxes chart as it breaks these categories down into a lot more detail. It’s a large graphic and at times was a little unwieldy in my browser window, but still I could spend hours looking over that data.

One area that has always disappointed me, that is evident on that chart, is the paltry sum that is spent on science and exploration relative to other expenditures. Wouldn’t it be awesome if the advancement of science was the #1 priority? That would be a much better world.

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