What time should I wake up in the morning? What should I eat for breakfast? What should I wear to work? These are just a few of the many decisions people face every day. These decisions are in our own hands, allowing us to determine the results; we even have the ability to choose what we do with our hard earned money, well, most of it. During 2017 in the United States, if you earn $0-$18,650 of income a year, the tax rate is 10%, while if you earn $470,701+ of income a year, the tax rate is 39.6% . So, what exactly does the government do with this money being taken from us? Is it helpful or harmful? The answer is both. Charles Wheelan, the author of Naked Economics, writes, “Government can provide essential public goods- or it can squander enormous tax revenues on ineffective programs and pet projects” . In other words, the government takes their revenue and spends some of it on necessary goods for society, while the rest is spent on pointless projects, yet we cannot cut government spending without consequence.
Let’s start with the good the government has done with collecting cuts of our income. Two-thirds of the government spending is categorized under “mandatory spending”. Under this, falls things like Social Security and Medicare. It also includes, more specifically, programs like Supplemental Nutrition Assistance Program, previously known as Food Stamps . Eligibility determines the spending levels in this category of spending. For example, the more people that qualify for Medicare, the more money is spent for it. Programs that are to the advantage of others are more bearable ways of government spending.
Congress does, however, have a say in spending is the 5-10% of revenue that is wasted on unnecessary projects. In 2017, $3.4 million went towards hamster cage matches, $300,000 went to a study of which gender plays with Barbie Dolls, and $5 million on studying if students who are in sororities and fraternities consume more alcohol than college students who are not in one . Upon reading that this is what some of our income is spent on is quite angering considering that money could have been spent on something more beneficial. Unfortunately, sometimes the government might even pour loads of money into a project that, in turn, fails. Naked Economics states, “First, their tax money is squandered when projects that never should have been funded in the first place go bust…car plants don’t get built; students don’t get loans; entrepreneurs don’t get funding.” I would rather my taxes go towards retirement funding than Barbie Dolls. Actually, I would rather get to take home 100% of my income, but cutting off government spending as a whole would be detrimental.
When analyzed, the government seemingly spends most of tax revenue on helpful programs. Yet, there are a few aspects that may be worth cutting back on, that would allow a decrease in national debt or even allow more money to be put back into our own pockets. While that may be seemingly impossible for one person to individually make a difference on, we can regulate our own personal spending on things we want and need, taking advantage of the minimal control granted to us over our own paychecks.
- “IRS Income and Tax Brackets,” CPA Practice Advisor, Accessed June 19, 2017, http://www.cpapracticeadvisor.com/news/%2012281147/irs-income-tax-rates-and-brackets-for-2017.
- Charles Weelan, Naked Economics: Undressing the Dismal Science (New York: W.W. Norton & Company, 2010), 80.
- “Federal Spending: Where does the Money Go?” National Priorities Project, Accessed June 19, 2017, https://www.nationalpriorities.org/budget-basics/%20federal-budget-101/spending/
- Aaron Bandler, “9 Ridiculous Things the Government Wasted Money on This Year,” The Daily Wire, Accessed June 19, 2017, http://www.dailywire.com/news/12309/9-ridiculous-things-government-wasted-money-year-aaron-bandler
- Charles Weelan, Naked Economics: Undressing the Dismal Science (New York: W.W. Norton & Company, 2010), 87.