April 17, 2022
Read time : 3 min

April is tax season and that means it’s time to get to know how your tax dollars are spent. Our tax dollars are used in a variety of ways to fund programs that keep the country running. 

So how are your tax dollars used? They are typically broken into two main buckets: 

  1. Mandatory spending, which includes programs that are required by law like Medicare, Medicaid, Social Security, unemployment insurance, and the child tax credit. When it comes to mandatory sepending, here are a few examples of how it is broken down: 
  • 25% of tax dollars go to Health Care
  • 23% goes to Social Security
  • 8% goes to safety-net programs
  • 7% goes to benefits and services for veterans and federal employees 
  1. Discretionary spending, which includes programs, departments, and initiatives like military and defense, health and human services, government agencies, and more. This type of funding can change every year. Here are a few examples of how discretionary spending gets split up, on average:
  • 2% goes to Education
  • 16% goes to Defense
  • 2% goes to scientific research

But Wait…There’s More!

There’s actually one other bucket where your tax dollars go and that is to pay the interest on the national debt. Yep! You heard right. On average, 8% of your tax dollars go to paying off interest on the national debt.  

Learn How Your Taxes are Spent Locally 
Once you know what your tax dollars are funding, then you can better determine your policy priorities. And with the Mid-term Elections this fall, it’s a good time to start thinking about how candidates at the local, state, and federal level align with your priorities and values. If you’re looking for a way to learn more about how fiscal policy and tax distribution affects your local community. Then check out our Voter’s Guide to Local Fiscal Issues.