March 14, 2014
Tax Day shows how your income taxes were spent – those are the taxes due each year on April 15. Tax Day materials do not include the payroll taxes that directly fund Social Security and Medicare.
Tax Day 2014 shows how federal funds were spent during fiscal year 2013, the time period that most closely corresponds to your tax filing for income earned in calendar year 2013.
In order to do this analysis, National Priorities Project (NPP) separates federal funds from trust funds. Trust funds, generated from sources such as payroll taxes, can only be used for specific programs like Social Security and Medicare. All other funds are federal funds, including revenue from your federal income taxes.
Thus, NPP used projected federal fund outlays for fiscal 2013 as reported by the White House Office of Management and Budget (OMB) in the Budget of the United States Government, fiscal year 2014, in the Public Budget Database.
When OMB publishes federal budget data, it uses several categories of spending called functions, and within those, subfunctions. While NPP uses 13 different budget categories to sort federal spending, these do not correspond to the official government functions. Rather, they are meant to organize the many government subfunctions into intuitive groupings. In order to create Tax Day 2014, federal fund outlays were sorted into the following categories:
Elementary, secondary, higher and vocational education.
Subfunctions: 501, 502, 503
Example programs:
Natural resources and environment, conservation, and supply and use of energy.
Subfunctions: 271, 272, 274, 276, 301, 302, 303, 304, 306
Example programs:
Agriculture as well as nutritional assistance programs.
Subfunctions: 351, 352, 605
Example programs:
Law enforcement and the justice system, commerce, overhead costs of the federal government, and undistributed offsetting receipts.
Subfunctions: 372, 373, 376, 751, 752, 753, 754, 801, 802, 803, 804, 805, 806, 808, 809, 922, 929, 951, 952, 953, 954, 959
Example programs:
Housing assistance and credit, community development, disaster relief, and services supporting social needs.
Subfunctions: 371, 451, 452, 453, 506, 604, 925
Example programs:
Annual interest paid on the national debt, net of interest income received by assets the federal government owns.
Subfunctions: 901, 902, 903, 908, 909
Diplomatic, development, and humanitarian activities abroad.
Subfunctions: 151, 153, 154, 155
Example programs:
Health care programs and services, and occupational and consumer health & safety.
Subfunctions: 551, 552, 554, 571, 921, 926
Example programs:
National defense, nuclear weapons activities, war costs, and international security assistance.
Subfunctions: 051, 053, 054, 152
Example programs:
General science research and space flight research and activities.
Subfunctions: 251, 252
Example programs:
Income security programs, federal employee retirement and disability, and job training.
Subfunctions 504, 505, 601, 602, 603, 609, 651, 923
Example programs:
Development and support of air, water, ground, and other transportation.
Subfunctions: 401, 402, 403, 407
Example programs:
Health care, housing, education and income security for veterans.
Subfunctions: 701, 702, 703, 704, 705
Example programs:
Your personalized tax receipt shows how much of your federal income taxes went to each of the 13 categories specified above, using outlays data from the OMB Public Budget Database, as described. In addition, the receipt shows how much of your taxes went to particular programs within each of those categories:
This receipt item contains all “Customs and Border Protection” accounts as well as “Automation Modernization,” “Construction,” “Border Security Fencing, Infrastructure, and Technology,” and “Air and Marine Interdiction, Operations, Maintenance, and Procurement” in the Public Budget Database outlays data for fiscal year 2013.
This receipt item reports fiscal year 2013 outlays for the Children’s Health Insurance Program as reported in the Department of Health and Human Services FY2014 budget justification, page 69.
This receipt item reports fiscal year 2013 outlays for the Community Development Block Grant as reported in the Department of Housing and Urban Development FY2014 budget justification table titled “Budget Outlays.” (Source table available for download here.)
This receipt item contains all “Corporation for Public Broadcasting” accounts in the Public Budget Database outlays data for fiscal year 2013.
This receipt item contains the “Public Transportation Emergency Relief Program” account in the Public Budget Database outlays data for fiscal year 2013.
This receipt item reports all outlays in subfunction 753, “Federal Correctional Activities,” in the Public Budget Database outlays data for fiscal year 2013.
This receipt item reports all outlays in subfunction 151, “International Development and Humanitarian Assistance,” in the Public Budget Database outlays data for fiscal year 2013.
This receipt item reports all outlays in subfunction 504, “Training and Employment,” in the Public Budget Database outlays data for fiscal year 2013.
This receipt item contains all “Low Income Home Energy Assistance” accounts in the Public Budget Database outlays data for fiscal year 2013.
This receipt item reports fiscal year 2013 outlays for the Medicaid program as reported in the Department of Health and Human Services FY2014 budget justification, page 74.
This receipt item reports all outlays in subfunction 252, “Space flight, research, and supporting activities,” in the Public Budget Database outlays data for fiscal year 2013.
This receipt item contains all “National Forest System” accounts in the Public Budget Database outlays data for fiscal year 2013.
This receipt item reports all outlays in subfunction 053, “Atomic Energy Defense Activities,” in the Public Budget Database outlays data for fiscal year 2013.
This receipt item contains the “Student Financial Assistance” account in the Public Budget Database outlays data for fiscal year 2013.
This receipt item contains the “Pension Benefits” account within subfunction 701, “Income Security for Veterans,” in the Public Budget Database outlays data for fiscal year 2013.
This receipt item contains the account “Temporary Assistance for Needy Families” in the Public Budget Database outlays data for fiscal year 2013.
To generate average taxpayer receipts for the U.S. and for each state, we used tax return data from the IRS. Our receipts are generated using information for tax year 2011, the latest available, state-level information at the time of publication: http://www.irs.gov/uac/SOI-Tax-Stats---Historic-Table-2
The averages are calculated by dividing income tax amount (line 105 in the 2011 version of the IRS spreadsheets) by the total number of applicable returns (line 104). The income tax amount represents total income taxes owed after deductions and credits but does not reflect refundable tax credits, such as the refundable portion of the EITC. Note that we didn’t use the Total Tax Liability field because it includes some payroll taxes, which we don’t include in our Tax Day materials.
Totals were then adjusted for inflation from calendar year 2011 to 2013 dollars using deflators from OMB's Table 101. in the Historical Tables.
NPP’s Federal Priorities Database maps these average individual income taxes by state and has them available for download: http://nationalpriorities.org/interactive-data/database/mashups/fl9m2vxmj77zugfn/
Education tax breaks include American Opportunity Tax Credit, Deductibility of Student-Loan Interest, Deduction for Higher Education Expenses, Discharge of Student Loan Indebtedness, Education Individual Retirement Accounts, Exclusion of Employer-Provided Educational Assistance, Exclusion of Interest on Savings Bonds Redeemed to Finance Educational Expenses, Exclusion of Scholarship and Fellowship Income, Hope Tax Credit, Lifetime Learning Tax Credit, Parental Personal Exemption for Students Age 19 or Over, and Qualified Tuition Programs.
