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Monday, April 14, 2014

WSJ: Three Issues on Most Taxpayers' Minds

Wall Street Journal:  As Tax Day Nears, Where Does Your Money Go?, by Laura Saunders:

Where do your tax dollars go? What are the most popular deductions? And how long must people work each year to pay Uncle Sam his due?

Those issues may be on the minds of many taxpayers as they make their contributions to the common purse.

The answers, provided by three nonprofit, nonpartisan groups based in Washington, underscore how much the government relies on the income tax on individuals, which supplies nearly half of total federal revenue.

1. Where does your money go?

Check out the "tax receipt" accompanying this column. It was prepared by Loren Adler, research director at the Committee for a Responsible Federal Budget, and it shows how $100 of revenue was allocated among spending programs in fiscal year 2013.

WSJ

2. What's behind Form 1040?

The Tax Policy Center has posted a fascinating interactive tax form online. The link brings up both pages of the 1040 form as well as Schedule A, which is where taxpayers can claim itemized deductions for write-offs such as charitable donations and mortgage interest.

Click on any line of the form, and information about it pops up. What is the purpose of the line item? How many people are affected by it, and how much do they earn? How much revenue is raised or lost as a result? ...

3. How long does it take to pay Uncle Sam?

For decades the Tax Foundation has publicized Tax Freedom Day, a date that reflects the group's estimate of how long it takes the nation collectively to pay its tax bill for the year. The group arrives at the figure by dividing the combined amount of federal, state and local taxes paid by total income. This year's Tax Freedom Day is April 2

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Comments

Response to the #1: The Committee for a Responsible Fiscal Budget is, according to sourcewatch.org, a group composed of former Chairmen of the Federal Reserve Board and is heavily funded by Pete Peterson Foundation. Pete Peterson is a wealthy wall street banker. I am very skeptical of this claim that only 6.41% of taxes goes toward interest. The Grace Commission appointed by Ronald Regan in his first year as President found that 100% of federal income tax goes towards interest on government debt. The report is available here: http://digital.library.unt.edu/ark:/67531/metacrs9044/m1/1/high_res_d/IP0281G.pdf

Posted by: Bill Daburgereater | Apr 14, 2014 12:05:56 PM