Vermont Retirement Planners, LLC

54 Highland Avenue
Manchester Center, VT 05255
nick@vtretirement.com
(802) 367-3958

87 North Main St.
Rutland, VT 05701
nick@vtretirement.com
(802) 772-7945

Tax Read Time: 2 min

What Do Your Taxes Pay For?

Taxes are one of the biggest budget items for most taxpayers, yet many have no idea what they’re getting for their money.

The average household spends more on taxes than on groceries, clothing, or healthcare. In fact, 11% of our income, on average, goes to personal income taxes, which doesn’t include sales tax, property tax, Social Security payments, or Medicare payments. So what do we get in return?1

The accompanying chart breaks down the $6.27 trillion in federal spending for 2022 into major categories. One of the biggest categories is Social Security, which consumes almost one-fourth of the budget. Safety net programs, which includes food assistance and unemployment compensation, takes another 11%. Defense and related items take 18% of the budget, and 24% goes to Medicare and health programs.2

Are taxes one of your biggest budget items? Take steps to make sure you’re managing your overall tax bill. Please consult a tax professional for specific information regarding your individual situation.

Pieces of the Federal Pie

More than 60% of 2022 federal spending was used for Social Security, Medicare, defense, and related programs.

Source: Treasury.gov, 2022

1. ValuePenguin.com, September 1, 2022
2. Treasury.gov, 2022

The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG Suite is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright FMG Suite.

 

Related Content

Paying Off a Credit Card

Paying Off a Credit Card

Enter various payment options and determine how long it may take to pay off a credit card.

Social Security: The 64,000 Dollar Question

Social Security: The 64,000 Dollar Question

One of the most common questions people ask about Social Security is when they should start taking benefits.

Federal Income Tax

Federal Income Tax

Use this calculator to estimate your income tax liability along with average and marginal tax rates.

 

Have A Question About This Topic?







Thank you! Oops!

Filing Final Tax Returns for the Deceased

The federal government requires deceased individuals to file a final income tax return.

Don’t Be Your Own Worst Enemy

Emotional biases can adversely impact financial decision making. Here’s a few to be mindful of.

Saving on Subscription Service Costs

There are ways to improve your physical fitness without denting your fiscal fitness.

View all articles

How Much Home Can I Afford?

With a few simple inputs you can estimate how much of a mortgage you may be able to obtain.

A Look at Systematic Withdrawals

This calculator may help you estimate how long funds may last given regular withdrawals.

What Is My Current Net Worth?

Use this calculator to estimate your net worth by adding up your assets and subtracting your liabilities.

View all calculators

Principles of Preserving Wealth

How federal estate taxes work, plus estate management documents and tactics.

Investment Strategies for Retirement

Investment tools and strategies that can enable you to pursue your retirement goals.

Your Cash Flow Statement

A presentation about managing money: using it, saving it, and even getting credit.

View all presentations

When Markets React

When markets shift, experienced investors stick to their strategy.

Keeping Up with the Joneses

Lifestyle inflation can be the enemy of wealth building. What could happen if you invested instead of buying more stuff?

Timing Your Retirement

This short video illustrates why knowing when to retire can be a crucial part of your strategy.

View all videos