Unfortunately, It’s Tax Day. Where Does All Your Money Really Go?

Former President Ronald Reagan, known for his wisecracks and witticisms, focused much of his ire on the exorbitant level of taxes that Americans pay.

“Government’s view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it,” the Gipper once quipped.

“Today, if you invent a better mousetrap, the government comes along with a better mouse,” he also joked.

Nearly all Americans (rightly) have a poor view of the federal government, and how much money our elected officials and bureaucrats waste each year.

In 2020, the feds spent $1.5 million to walk lizards on treadmills, and $1.3 million to study if Americans will eat ground-up bugs. If that’s not a waste of money, what is?

Sadly, there’s not a lot that unites Americans these days, but contempt for Congress does.

According to Gallup, Congress has a 21% approval rating.

Another thing that every person dislikes as much as everyone else is Tax Day.

April 18, 2022 is the deadline for Americans to file and pay the taxes they owe for 2021.

If an individual doesn’t file and pay their taxes by April 18, they may be subject to various penalties and interest on their taxes until their bill is paid in full.

However, the Internal Revenue Service (IRS) permits individuals to file an extension if they need more time to prepare their federal tax return, though an extension is not guaranteed.

In 2020, Americans collectively paid $3.42 trillion in federal taxes.

Written out, that’s: $3,420,000,000,000.

But where does all that money go?

According to the Congressional Budget Office (CBO), in 2020 the federal government spent a total of $6.6 trillion. This left the government with roughly a $3.1 trillion deficit for the younger and future generations to pay off.

The federal government spends taxpayer dollars on three general areas: mandatory spending, discretionary spending, and interest on the national debt.

1. Mandatory spending.

The largest budget item in the federal budget is mandatory spending, or allocations that the government has essentially put on autopilot and must fund.

These include Social Security payments, spending on Medicare and Medicaid, and other expenses like unemployment compensation, veteran’s benefits, and the Supplemental Nutrition Assistance Program.

In 2020, the government spent $4.6 trillion on these “mandatory” programs.

2. Discretionary spending.

The second biggest item on the federal government’s dole is spending on those things which the government could, theoretically, cut back on.

These “discretionary” items total $1.6 trillion, including spending on health programs, transportation, education and $714 billion for defense.

3. Interest on government debt.

Lastly, the government spent $345 billion on interest for the national debt.

As the government’s national debt continues to grow (it’s currently over $30 trillion), and because interest rates will likely rise over the next decade, the amount of the federal budget that will go towards interest will continue to grow.

Ramsey Government Spending

Photo Credit: Ramsey Solutions

As Christians, we’re obligated to pay our taxes even if the government decides to waste our money, or fund evil activities, like it all too frequently does. Take Planned Parenthood as an example.

When asked by the Pharisees whether it was lawful to pay taxes to Caesar, Jesus replied, “Render to Caesar the things that are Caesar’s, and to God the things that are God’s” (Mark 12:17).

Even though we’re compelled, legally and morally, to pay our taxes, Congress should remember this wise observation from President Reagan: “We don’t have a trillion-dollar debt because we haven’t taxed enough; we have a trillion-dollar debt because we spend too much.”