US Budget Facts & Figures

The federal U.S. budget in FY 2015 was $3.8 trillion or 21% of the US economy. This is about $12,000 for every person in the country.

National Priorities


Basic Expenses

Social Security and Medicare

National Parks and Conservation

Defense

Highway and Airport Construction

Postal Service

Currency

Interstate and International Trade

 

Basic Revenue (Taxes)

Personal income taxes – 43%

Social security and Medicare payroll taxes – 35%

Corporate income taxes – 13%

Other taxes (including estate tax) – 5%

Excise taxes on gasoline and other fuels – 4%

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Defense accounts for over $700 billion, or 20% of the budget, but 58% of the remaining “discretionary” funds after interest on the debt, Social Security, Medicare and other “mandated” entitlements are paid. Most of the national debt comes from past wars so that could also be considered a military expense.

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Social Security, Medicare, Unemployment Insurance, Medicaid and other health programs account for over $2 trillion, or 55% of the federal budget.

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Health programs, defense and debt combined account for about $2.99 trillion of the $3.7 trillion budget (over 80%).  The remaining $695 billion is for everything else.

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The percentage of discretionary budget funds that go to education: 4%

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The Corporation for Public Broadcasting receives less than .1%

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Size of the Government

In the 1920s, the federal government spent less than $40 billion in today’s dollars. This was only around 3% of the Gross Domestic Product (GDP) and the government did not play much of a role in the economy.

Federal spending increased significantly during the New Deal in the 1930’s, but the real increases came with World War II. In 1944, outlays reached an all-time high of 44% of the GDP. During the 1990s, federal spending did not keep pace with the expansion in the economy, or population growth, so federal spending fell. By the end of the decade, federal spending was at a low not seen for almost 35 years. More recently, federal spending has increased due to significant increases in military spending, rising health care costs, and steps taken to stabilize the financial system and boost the economy.

Budget of the United States Government, Historical Tables

Development/Foreign Aid

The UN ranks countries on the ratio of their Official Development Assistance (ODA) as a percentage of their Gross National Income (GNI). For many years the UN set a goal of .70% for each country. The US is ranked 20th in the world with a ratio of .19%.

The Organization for Economic Co-operation and Development


In 2015, $20 billion or 0.6% of the total U.S. budget was allocated for foreign aid. This included the following:

Maternal health and child survival (such as vaccines):

.0188%

Nutrition

.0030%

Vulnerable children (orphans and displaced children):

.0005%

HIV/AIDS programs: USAID & the President’s Emergency Plan for Emergency Relief (PEPFAR)

.1578%

Malaria, Tuberculosis and other infectious diseases:

.0283%

Development assistance (i.e. water & education)

.0659%

International disaster assistance:

.0498%

Migration & refugee assistance & emergency assistance:

.0818%

The U.N. Millennium Challenge account:

.0236%

Contributions to international peacekeeping activities & other operations:

.0700%

Food for peace (Title II)

.0385%

US Conference of Catholic Bishops


Taxes (Revenue)

57% of Americans say that they pay too much in federal income taxes, but 45% pay no federal income taxes at all — up from 40% in 2013.

Gallup


In 2016, the amount of wealth needed to pay the federal estate tax, also known as the “death tax” is: $5.25 million – for 1 person, $10.5 million for 2 people – affecting  about 0.2% of the population. For the few estates that owe this tax , the effective tax rate — the share of the estate’s value paid in taxes — is an average of 16.6% — far below the top income rate of 40%.

Urban-Brookings Tax Policy Center & Center on Budget and Policy Priorities


The federal tax system treats investments differently than income from wages. Income from investments and called “capital gains” — the appreciation in property.  The more wealthy people are, the higher the percentage of their income comes from capital gains. Income from capital gains is currently taxed at a lower rate, 15%, than income from wages, 35% for top income earners.


“Payroll” taxes are withheld from wages to pay for Social Security, Medicare, and other mandatory federal programs. The first $106,800 of a person’s income is subject to this tax, so wealthy people who make much more than this amount pay a much smaller percentage of their income in payroll taxes.


Tax breaks overwhelmingly go to top earners and corporations. In 2016, there were 118 individual breaks with a net total estimated cost of $1 trillion and 80 corporate breaks totaling $185 billion.

Pew Research


Tax deductions — one important type of tax break — are far more likely to benefit the wealthy than middle- and low-income people, because deductions only offer savings to taxpayers who itemize deductions. 16% of households making between $25,000 and $30,000 itemize tax deductions, while nearly 100% of those making over $200,000 itemize.

Pew Research


The National Debt

Between 2008 and 2011, the annual federal deficit ranged from $400 billion $2 trillion. In 2016, the national debt rose to $19 trillion or about 106% of the previous 12 months of Gross Domestic Product (GDP).


$6.2 trillion or approximately 45% of the debt held by the public is owned by foreign investors — the largest are the People’s Republic of China ($1.25 trillion) and Japan ($1.15 trillion).

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Interest on the national debt is $242 billion, almost 7% of the federal budget.

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