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Here's how the US government spends your income taxes

Have you ever wondered what Uncle Sam buys with your money?
Written by Tax Editors on

According to the IRS, about $3.5 trillion was collected in federal taxes for the 2020 fiscal year. Of that number, $1.6 trillion came from individual income taxes like your own. With numbers that massive, have you ever wondered what Uncle Sam does with the taxes you pay? 

While there's an increasingly heated debate in Congress concerning where and how tax dollars should be spent in the future, there's a clear paper trail showing where your dollars went during the past year.

Using data directly from the US government, Data Lab and USAspending.gov have broken down the major federal government expenditures by category in 2021 (the smallest categories are not pictured but can be found here). The chart below reveals where the majority of your income taxes are spent:

Spending by Main Source Categories and Agency in 2021

spending-by-source-categories-and-agencies-in-2021.png

*The Economic Impact Payments (stimulus payments; $569.5B) issued in response to the COVID-19 pandemic, the Child Tax Credit Payments ($79.0B), unemployment benefits, food assistance, housing assistance, and more are included in the Income Security category.

Credit: USAspending.gov in partnership with Data Lab

If you want to learn more about where your money is going, check out USAspending.gov.

[This article was originally published on The Simple Dollar in November 2020. It was updated and rewritten in December, 2021.]

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