The receipt

[wiggin]

I ran across an interesting idea today: a taxpayer receipt (PDF warning). Basic idea is that after you pay your taxes, the IRS sends you a receipt showing how much of your tax bill went to what. An example from the PDF above was pulled out by the Economist's DiA blog:



My question is: do you think the average taxpayer would be surprised by the results? And secondly, do you think it would change the debate on where we can most effectively cut the deficit/debt? I think economists and most educated people know that money is going to have to come out of entitlement spending and defense (despite what Bill Kristol and co. said in the WSJ today), but this receipt really drives the point home.

Thoughts? Good idea/bad idea?

[LittleFuzzy]

My question is: do you think the average taxpayer would be surprised by the results?

I know I was surprised by some of it. That foreign aid was as high as it was, and that the Pell Grant program accounted for so much.

[Loki]

Those are only federal expenses. Most of the services we see in our day to day life are paid for by state and local governments.

[Hazir]

Yes Loki, but we are talking about Federal taxes, so it makes sense to look at how that is spent.

It's an interesting 'game', it probably makes it easier for people to understand that cutting taxes has real effects, some of which they might not like so much.

[Dreadnaught]

Saw this a few days ago, was also surprised by a few things. EG that Amtrak gets so much and provides so little service. Truly a massive example of waste —*and this coming from someone who supports subsidized rail transit in some areas.

But the first 4-5 aren't totally surprising and are far-and-away the real problems. If we fix those, we will be in so much better shape to keep on plunking money towards the rest.

[Lewkowski]

I was amused by some comments made by people on the economist forum complaining that we spend so little on education. Of course this is just federal tax dollars and not the gobs and gobs of money you pay at the local level in property taxes.

And I knew Medicare was an expensive item but I didn't know it was THAT expensive. Yikes.

[EyeKhan]

I'd vote for this. I was surprised NASA cost more than the EPA.

[Being]

Why don't we see federal employee pensions on there?

[Being]

Saw this a few days ago, was also surprised by a few things. EG that Amtrak gets so much and provides so little service. Truly a massive example of waste —*and this coming from someone who supports subsidized rail transit in some areas.

But the first 4-5 aren't totally surprising and are far-and-away the real problems. If we fix those, we will be in so much better shape to keep on plunking money towards the rest.

The first three don't effect the funding of the rest. They are a seperate and dedicated revenue stream. Are you saying make cuts to SS but continue collecting the tax and put it toward something else?

[Veldan Rath]

The first three don't effect the funding of the rest. They are a seperate and dedicated revenue stream. Are you saying make cuts to SS but continue collecting the tax and put it toward something else?

Uhhh, we do that already. There is no money in the SS fund. (At least I thought we did)

[Being]

Uhhh, we do that already. There is no money in the SS fund. (At least I thought we did)

The money has been borrowed against but the revenue streams remain separate.

[Veldan Rath]

The money has been borrowed against but the revenue streams remain separate.

As it comes out of my paycheck the same time as the rest of the taxes, and that there is no 'lockbox', your distinction seems irrelevant.

[Being]

Yet in the overall scheme of things it is very relevant. Borrowing from the fund is no different than borrowing from the Chinese...there are legal requirements that it be paid back with interest.

[wiggin]

Why don't we see federal employee pensions on there?

The list isn't complete; it is selected items, the full receipt would be longer and likely itemized differently. Furthermore, I imagine some of the pensions are rolled into individual agency funding and aren't a separate line item (e.g. pensions for CMS workers are probably in the Medicare and Medicaid lines).

Yet in the overall scheme of things it is very relevant. Borrowing from the fund is no different than borrowing from the Chinese...there are legal requirements that it be paid back with interest.

True, but SS is officially in the red now. It might climb back out for a few years this decade depending on how payrolls are looking, but very soon it will be permanently in the red. That 'trust fund' (really just US debt bought with SS surplus; awful investment there IMO) will be exhausted thereabouts of 30 years from now, and will have to finance its deficits by borrowing real money. As it is, the displacement effect means that non-SS programs will have to effectively borrow more now. Either way, SS definitely needs to be fixed now to phase in a solution that will address the shortfall in coming decades.

Of course, defense and healthcare are far more pressing issues.

[Dreadnaught]

The first three don't effect the funding of the rest. They are a seperate and dedicated revenue stream. Are you saying make cuts to SS but continue collecting the tax and put it toward something else?

As has been pointed out by Veldan, the Social Security fund is by law invested entirely in Treasury bills. Which means the SS fund (and the Medicare fund as well, I think) are basically being borrowed against. The money is "sitting in a trust fund" in the most basic sense; in reality, it's held in a pile of US debt that the US may not be able to pay in the long term if liabilities continue to increase.

[Being]

As has been pointed out by Veldan, the Social Security fund is by law invested entirely in Treasury bills. Which means the SS fund (and the Medicare fund as well, I think) are basically being borrowed against. The money is "sitting in a trust fund" in the most basic sense; in reality, it's held in a pile of US debt that the US may not be able to pay in the long term if liabilities continue to increase.

So you don't want to answer the question. No problem, I knew you'd skirt answering how you'd of achieve what went through your mind when you decided it was a good idea to raid SS funds.

[Dreadnaught]

Who said it's a good idea to raid social security funds? We've basically been doing it for generations and it's been a boondogle.

[Being]

Who said it's a good idea to raid social security funds? We've basically been doing it for generations and it's been a boondogle.

" If we fix those, we will be in so much better shape to keep on plunking money towards the rest." sounds a lot like promoting it as a good idea.

[Dreadnaught]

Promoting what as a good idea? Fixing our Social Security problems? Is this not a good idea?