During the upcoming presidential debates there will likely be a lot of attention paid on what the role of government ought to be. As taxpayers, you and I account for over 80 percent of the government’s annual revenues from our income taxes and our payroll tax deductions that fund Social Security and Medicare. We also contribute still more tax dollars through excise and estate taxes. In other words, regular people account for the lion’s share of the federal government's income.
So, how does this money come back to us? There are four main ways:
First, the federal government provides funds to state governments which they include in their annual budgets. For example, in my home state of Massachusetts, roughly 25 percent of our budget is funded by the federal government. That money helps pay for health care, infastructure improvements and many other state initiatives.
Second, the federal government makes payments directly to many of my neighbors, through benefit programs like Social Security, Medicare, unemployment insurance, and food stamps – the Supplemental Nutrition Assistance Program (SNAP).
Third, the federal government funds lots of programs in my community which provide services to my neighbors and their families through programs like Head Start and the Section 8 housing program.
Photo courtesy of Joy Kennelly
Finally, the federal government hires area businesses to provide goods and services. Government contracts fund scientific research, repair bridges, and purchase fighter jets through private companies that employ local workers.
If you’d like more information about federal spending in your community, check out NPP’s Federal Priorities Database.