What Percentage of My Income Tax Is Spent On National Defense?

Ever wondered how much of your income tax pays for national defense? A number of online tools exist to help you answer that question. However, because each tool calculates government spending and taxation differently, you’ll find a wide array of answers. Below are various ways to figure out the answer.

The Data Viz Challenge Winners

Roughly 40 design teams competed for $10,000 in prize money offered by Google and Eyebeam Art & Technology Center. The challenge was to create engaging data visualizations that make it easier to understand how the government spends our taxes. Winners were announced on Tax Day—April 18th.

The following designs offer the most useful data for researching your personal tax contribution to national defense:

WhereDidMyTaxDollarsGo.com: The winner of the competition, this site asks you to enter your annual income and filing status. Based on your input, it generates a series of tables and charts telling you how your 2009 taxes were spent by the government during 2010. One table reports your federal taxes owed, applying the standard deductions and breaking down your obligation by tax bracket. Two more tables show your Social Security and Medicare taxes for the year. Based on these numbers, the site reports your total taxes owed and your effective tax rate for the year.

WhereDidMyTaxDollarsGo.com lists spending on national defense at 17% with an additional 3% for veterans’ benefits and services.

Every Day Is Tax Day (fchasen.com/taxday): The contest runner-up takes an interesting approach to understanding how the government spends your hard-earned tax dollars. First, you enter your salary and the tax year. It then uses an image of a wall clock with various colored bands around the edge to illustrate how much of your work day is spent generating income for government departments. Like WhereDidMyTaxDollarsGo.com, clicking on a particular department allows you to drill down even further to see how that department spends your money.

According to the site, if you made $50,000 in 2010, you spent about 23 minutes each work day generating funds for the Department of Defense, which equates to about 4.8% of your total income and roughly 22% of your taxable income. This number doesn’t include contributions to other defense-related departments like the Department of Veterans Affairs and the Department of Homeland Security.

Stockmapper.com/taxMapper.html: This site allows users to see total federal expenditures and spending by category. It reports numbers nominally, adjusted for inflation, and as a percentage of total federal expenses . While the site reports that national defense is just over 20% of all government spending, a helpful slideshow correctly points out that spending (including national defense) has decreased over time when viewed as a percentage of U.S. Gross Domestic Product (GDP).

WhatDoYouWorkFor.Appspot.com/index.html: Similar to Every Day is Tax Day, this site asks users to enter their income, work schedule, filing status, and tax year. With that information it produces a color-coded calendar illustrating what portion of your annual work schedule is dedicated to each government spending category. According to the site, if you made $50,000 in 2010, you spent roughly 25% of your time generating revenue for the federal government and 5% of your time providing funds to pay for national defense.

CanIGetAReceiptWithThat.com:  According to the site, if you made $50,000 in 2010 and your filing status was single, you paid $2,513.29 towards national defense. With that money you could have bought 418 Chipotle burritos; 663 McDonald’s hamburgers; 1,262 Red Bulls; 1,675 cups of Starbucks coffee; 456 packs of Marlboro cigarettes; 3,351 bottles of Bud Light; or 8 iPods.

YOUR OFFICIAL GOVERNMENT RESOURCES

In addition to the various visualizations provided by the Data Viz Challenge, the White House offers a website called “Your 2010 Federal Taxpayer Receipt”. Users enter their social security, Medicare, and income tax payments in separate text boxes then choose their income level. The site produces a taxpayer receipt that breaks down spending by category and subcategory and lists amounts in dollars and as a percentage of total expenditures. According to the site, national defense accounted for 26.3% of spending in 2010.

Envision World Peace If You Can

While the previous sites list defense spending in the 17% to 26% range, the following sites call for a reduction of military spending, and report numbers that are much higher:

TrueMajority.org/ csba/priorities.php Founded by Ben Cohen of Ben & Jerry’s fame, True Majority reports military spending at over half of the government’s budget (50%+). The pie chart on this site shows defense spending dwarfing other categories.

WarResisters.org/pages/piechart.htm War Resisters League, another site seeking to reduce military spending, issued a pie chart showing military spending for 2009 at 36% of the budget with an additional 18% of the budget spent on past military campaigns.

Other sites also report military spending as a similarly large portion of the budget. According to the War Resisters League website, the Center for Defense Information reports defense spending at 51% of the budget, and the Friends Committee on National Legislation reports it at 43% of the budget.

EXPLAINING THE DIFFERENCES

Given the same user inputs, each of the sites mentioned above calculates government spending and personal taxes differently. The White House tool calculates tax bills that are much lower than the Data Viz entries (of course they would!). Certain sites report defense spending as low as 17% of total the total budget, while others report it at over half of the budget. So, how can you tell which numbers reflect a more accurate analysis of military spending?

The truth is, although the numbers differ greatly from one site to the next, they’re all accurate. They just rest on a vastly different set of assumptions and calculations. Many of the sites use different sets of data. And although all of the Data Viz designs use the same data set (provided by WhatWePayFor.com), they employ different calculations to arrive at varying answers to the same question. Because the reported numbers differ so vastly from one site to the next, you’ll want to keep the following factors in mind when researching your contribution to defense spending:

Not Your Standard Deduction: When calculating each user’s tax bill, some sites use a standard deduction while others do not. This can significantly affect how much money sites report for your taxes owed. To complicate matters further, rather than just applying a standard deduction, the White House site includes certain tax exemptions available to many taxpayers.

Give and Take: Sites also calculate spending differently. Some sites base their calculations on federal expenditures only, while others use both federal receipts and expenditures. Obviously, factoring the money received by the government will effectively reduce the overall tax bill.

Taxable Income: Because sites like “Every Day Is Tax Day” and “What Do You Work For” report how much of your work day or year is spent earning money for the federal government, rather than how much of your taxes go to the federal government, the numbers can seem a bit misleading. For instance, you might use “What Do You Work For,” discover that you only spend 5% of your work year generating revenue for the military, and think, “5% isn’t so bad.” However, it’s important to keep in mind that only 25% of your annual income pays for taxes, so while you’re only giving 5% of your income for national defense, it equates to 20% of your total tax payment.

Discretion Advised: Another important factor is whether a site uses discretionary or total spending in its calculations of government expenditures by category. Because Social Security and Medicare are mandated by law, and funds are collected separately by the government, Congress has no choice in how to spend that money. Mandatory spending takes up a large portion of the total budget, and can devalue the spending choices Congress makes. According to one site[6], national defense represents 20% of total spending (including mandatory spending), but accounts for 57% of discretionary spending. For this reason, some sites choose to report mandatory spending separately or exclude it altogether.

Underestimating the War on Terror: When calculating government spending, many groups choose to use budget authority, rather than government outlays. Budget authority uses spending authorized by the government, while outlays refer to actual spending in a particular year. Because the government often requests and authorizes additional funds during the year, budget authority doesn’t always provide the most accurate data.

So while the 2009 Federal Budget authorized $38 billion in spending for the War on Terror, the War Resister’s League relied on the previous years’ spending data to conclude that this was figure was hugely underestimated. They added an additional $162 billion to bring their number more in line with previous years’ spending (a subsequent check with Wikipedia confirmed that President Obama asked for an additional $130 billion in 2009 to fund this effort[3]).

The Defense Spending Shell Game: The Department of Defense is just one of several departments that carry out activities related to national defense. The Department of Homeland Security (including the Coast Guard) and the Department of Veterans Affairs have obvious ties to defense and are often listed as separate spending categories. The Department of Energy includes nuclear weapons. NASA is listed under Science & Space, but often carries out defense activities. Many other departments finance activities that most would consider related to national defense. When researching how the government spends your money on defense, make sure you know what departments a site includes in its spending calculations.

PAYING FOR OUR PAST SINS

A final factor overlooked by many spending calculations is interest incurred on debt from past military conflicts. When our government borrows money to finance a war, we have to pay the money back. While we record the amount borrowed as defense spending, we often end up paying significant amounts of interest on money borrowed to finance those wars. This interest is typically recorded as spending to pay down the national debt, but since a good deal of this debt can be directly linked to military activities, groups like the War Resisters League include a portion of these interest payments in their calculations of defense spending.

Works Cited

[1] “CSBA: TrueMajorityACTION.org.” TrueMajority.org. Web. 02 Aug. 2011..

[2] “The Federal Pie Chart.” War Resisters League. Web. 02 Aug. 2011..

[3] “Financial Cost of the Iraq War.” Wikipedia, the Free Encyclopedia. Web. 02 Aug. 2011..

[4] Matthews, William. “New Tools Calculate Your Tax Dollars at Work – Nextgov.com.” NationalJournal.com. Web. 02 Aug. 2011..

[5] Visualize Your Taxes: Grand Award Winner | DataVizChallenge.org. Web. 02 Aug. 2011..

[6] WhatWePayFor.com. Web. 02 Aug. 2011.

[7] “Your 2010 Federal Taxpayer Receipt.” The White House. Web. 02 Aug. 2011.

Readers, what do you think should be the right amount of national defense spending as a percentage of total spending?  Are you willing to contribute more of your income to defense spending?

With Europe in debt crisis, do you think Germany has the responsibility, especially given its past war crimes to bailout the rest of the Eurozone?

 

Sam started Financial Samurai in 2009 during the depths of the financial crisis as a way to make sense of chaos. After 13 years working on Wall Street, Sam decided to retire in 2012 to utilize everything he learned in business school to focus on online entrepreneurship.

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Comments

  1. says

    Interesting sites. Great research Sam. I’ve never thought about what percentage it should actually be. Defence is one of the few areas where I actually think government should be spending money, and I think everyone generally agrees the first responsibility of a government is to protect the people. That being said, where does protecting your own people end, and becoming a world policeman begin? Certainly I think the world has benefited from US intervention overseas, but have Americans? Do Americans have a right to be “citizens of the world” and not just protect themselves? I’m not sure any more. Ron Paul is making more and more sense these days with his non-interventionist military model. After 10 years in the Middle East I think we can safely assume our traditional model of the military is not built to fight terrorism, and it will never defeat terrorist cells.

    The elephant in the room is the economic effects of choking of some air to the military industrial complex (huge lobby, especially in key swing states), and cutting down on the USA’s social security for low-income young men (aka the military). I’m not saying every soldier is over there because they are low-income, but the stats are pretty eye-opening on that matter as well.

    • says

      I just wonder if we had 0 defense spending. Would other countries really try and invade us on a mass scale? Small scales yes, but to take over our country or wipe out an entire coast? Americans will rise up, even with zero defense spending!

      • Darwin's Money says

        It’s impossible to prove a negative. You already see countries like China and Russia throwing around their weight. Imagine if we were the Swiss? Just take a look at the atrocities in the past 100 years and multiply it by 10 with newer, more efficient means to kill humans on a massive scale. America keeps the peace. Regardless of whether you agree with what it costs; it’s just the way it is.

        • says

          China has the capacity to keep the peace in Asia and North Korea. Germany has the capacity to do so in Europe, and we can do so in the Americas. How about the Saudis keeping the peace in the Middle East? We all chip in!

  2. Fin-Edu says

    Answering your firts question I think that defense spending is way too high. Is good to have a good defense system in order to protect national interest and prevent invasions.(wich for some reason I highly doubt in the current world, the great evil, the Soviet Union is no longer there and China has become an economic enemy not a military one)But we spend too much money that could be used to improve national infrastructure , say bridges , better and bigger roads, you name it. Developing new weapons and defense equipment is money well spend, but acting as the world police has gotten us to a dead end. I coul add more arguments to this conclusion, but is better if I point you to a place that has reduced drastically its defense budget…the bell rings for the name Canada. They dont need a gigantic defense budget, they spend what is necessary to protect its sovereignty, thats the lesson we do not learn in the United States. Reduce our military influence in the world(just active duty, secret service and intelligence need to be out there to prevent) and focus on defending the country. And for heavens sake stop meddling in other countries business. Iraq did not called for our help, and we went there(wich I find an act of hipocresy is that Libya did called for our help and we crossed our arms)

    The reason for why this spending happens is clear as water, politicians are influenced by weapons manufacturers, is there is no war, there is no need for more ammunition, or supplies. Is all part of our economic machinery, but I am against this one. There is no excuse for sacrificing the lives and blood of so many of our brothers and sisters for the interest of gray haired businessmens.

    The second question is a tricky one. People assume that because Germany had a time period on wich their leaders commited terrible atrocities agaisnt mankind the current generation owe anything to the world. The past is the past, Germany changed and their evil leaders died. New Germany(lets call it this way) does not have the responsability to bail out any economy in the Eurozone. If bailing they out will affect them, probably they will only act as a joint consensus between all the members of the Eurozone.

    As a reference: this is for those who agree with expanding our goverment size. And becoming a more “socialized country”. Look at Greece, and you will be seen this country in the future if we follow the path of wealth distribution. Why do I need to share my hard earned money with someone who sitted al their lives on the couch. I say no way!!!

    “This is my personal opinion and should not be taken as an insult to anyone…”

    • says

      Guns and oil baby! I wonder how much money really goes into lobbying, bribing, laundering to politicians and elsewhere…

      I donno, if I were Merkel, I would use this opportunity to save Europe and really change the perception of Germany as the biggest killer due to WWII. This is Germany’s time to do the world a ton of good and the world will thank them!

      I’m a big advocate of Socialism once I’m retired. Aren’t you?

      • Fin-Edu says

        I am kind of mentally traumatized with socialism, I lived in my own flesh the mess it can cause to a country. I don’t like being entitled to anything, I prefer to organize my life in every detail and guarantee my own future. I agree with Gov. Perry point of view on overthrowing Social Security, of course it should be applied on an escalated basis , but I feel that in a decade we can transition to a Chilean stile private pension system.

        Germans could not give an acorn what the rest of the world thinks of them (that’s what got them in the big mess in the first place). I have asked some acquaintances about if they feel bad about what happened, and their answer was that they were not the executors of the acts, it was their ancestors. It would be like blaming the current generation of Spanish people for exterminating the complete aboriginal race of Cuba or the annihilation of several tribes in America. The past is the past. Now in a different standpoint I don’t think Germany or any other of the big European countries should cover the economical mismanagements of Greece, Spain, Italy and soon France (Countries that have big social spending, Ummm…. we are starting to see a pattern between social spending and government bankruptcy) If they bailout Greece, everyone will expect to be bailed out too, and then Europe will go down the drainage… We need leaders that manage the budgets with their brains and have the courage to face the challenge of not pleasing the common people even at the cost of their political careers.

        • says

          That is the biggest fear. Once Germany bails out Greece, other countries will line up to have their gimme gimme share too!

          Hmmm., good correlation with big government social wellfare spending and governments going broke!

  3. Untemplater says

    Wow didn’t know there are so many resources out there. I love that our country works hard to keep us safe, but the amount of money that is spent on defense is pretty disgusting. I wouldn’t feel as bad if our government operated efficiently but we know that’s not gonna happen anytime soon. International relations isn’t my specialty but I think we interfere with other countries too much.

  4. The Genius says

    Defense is an issue where we don’t see the benefits… only when we see the pains of a lack of defense spending do we realize how important it is.

  5. says

    It doesn’t even matter what you believe about the wars. Nor does it matter how highly you view our military’s foreign conquests. We spend too darn much. We subsidize the rest of the world.

    There are 44,500 US troops in Iraq, according to About.com and they’re all Americans. So much for a coalition.

    Same is true for Afghanistan, except there are some coalition troops there.

    This isn’t a new policy; in the 1991 Persian Gulf war we brought 540,000 Americans to war. Great Britian, the second most active in the war, brought only 43,000 people. France, number 3 on the list, brought 18,000. How can #1 commit 30 times the resources as #3?

    There are 196 countries in the world. We, as one nation, spend more every year on defense than every other nation on the face of the earth combined. It can’t be sustained, nor should it.

    • says

      Whoops, I forgot about our newest war off the headlines but still in play: Libya.

      Supposed to be NATO-led, but half of NATO countries backed out. Note that Germany and Australia are both absent, despite being superpowers of their own:
      http://static.guim.co.uk/sys-images/Guardian/Pix/pictures/2011/05/22/Libya_Coalition_Sorties1200.jpg

      And yet again, we commit more than half of all resources to a major military operation. And like all other wars, 50 years later we’ll still probably be there.

      • Fin-Edu says

        Europe and the rest of the world will not step up… Because they know that spending too much on warfare will have a huge toll in their economies. What must happen is that develop nations must meddle less in the world affairs. Just do their share of protecting freedeom, but I would prefer it happening back home that in the middle of nowhere. The world in general does not posses currently the resources to spend on foreign interest. CUt back Aids, reduce outside grants and bring everything to the country. We will see the deficit reduced and the benefits will follow. There is only one way to reactivate this half beaten economy, REDUCE TAXES!!! Cut them in half for the next 5 years… and implement a 5 year plan later to bring them to the normal level.

      • says

        Money and power.

        Lobbyists spend $1 for every $1000 in government spending. It’s not hard to see why Washington works the way it does. Politicians give votes and receive big campaign contributions that buy TV time. Americans go to the polls to vote for whoever looks best in a 30 second campaign ad.

        Rinse and repeat.

  6. says

    The new war is terrorist! We have to fight that differently than before. We appear to be changing very slowly. Drones are considerably cheaper than planes and soldiers, we still need troops. North Korea, Pakistan and perhaps China only react to intimidation. What percentage should be defense? Less!

  7. says

    Although the percentages are high, I think they are about right in my opinion. I don’t think you can invest too much into protection and security. It’s just like having emergency savings, you can’t save too much for emergencies because you can never be too prepared. I do however, agree that we use our military too much for other countries and try to solve everything our selves. If we weren’t the ‘world-police’ then we would be even stronger than we are now. Thus, we could lower tax percentages and save more money. But, I guess somebody has to do it, middle eastern countries are in bad shape and do need a little direction…but, not even the power-house country can make the world a better place.

    • says

      Good point about the parallel with emergency funds. Never know how much you really need, and perhaps more is always better… however think about how much money can go into education with our military spending! And the labor market!

      • says

        Yeah, your absolutely right. Favoring our taxes toward those causes would enhance our economy, no doubt about it!

        Our military needed to forceful in both world wars, and I know that you are aware they are the ones who fought for the freedom we have today. As Patrick said below me, I would rather pay the Soldier, military protection and technology than any thing else.

        I would be all for spreading tax spending on education and our economy as a whole, if we are able to maintain a stable military.

  8. Patrick says

    I am trying to look at this from all angles and I for would rather pay the Soldier than pay for a welfare mother or extending unemployment benefits. I would rather pay the Soldier than pay for the health care and education of illegals. I would rather pay the Soldier than the career politicians who sole focus is on getting reelected.

    If 90% of my taxes went to the defense budget I would be fine with that because then I would know that the majority of the liberal causes would get defunded. It amazes me that people in America take our military for granted so they can get liberal arts degrees. France chose art over military might, 100 years France was one of the most feared and respected countries in the world, now they are a big pushover who have been taken over twice by the Germans and are not being destroyed from within by the Muslim community.

    The problem of course is that we aren’t focusing the spending on all the right areas. I honestly believe that after this terrorism fad wears off the next war will be fought with 1′s and 0′s. A hacker or a well placed EMP bomb will do far more damage than 100 Pearl Harbors or 9/11′s.

    • says

      Soldiers who serve our country deserve more, no doubt about it.

      I don’t take our service men and women for granted at all. Their work is some of the highest honor one can obtain.

      I fear you may be right on the hacker front…..

  9. Darwin's Money says

    RE: Financial Samurai Reply:
    September 14th, 2011 at 8:52 pm

    “China has the capacity to keep the peace in Asia and North Korea. Germany has the capacity to do so in Europe, and we can do so in the Americas. How about the Saudis keeping the peace in the Middle East? We all chip in!”

    … The Germans abhor the military industrial complex and China is evil. Saudi Arabia? They’re not doing a very good job now maintaining any semblance of peace; that’s a lost cause in the region. How do you think those regimes (the remaining ones) stay in power? By fomenting a constant state of hatred and war against…the infidels…

    Unfortunately, our military might is what keeps the peace; not to say we don’t piss away billions on contractors, dumb projects and waste. And we shouldn’t be using groundforces anywhere in the mideast again unless we’re nuts. But to flat out throw in the towel? The world would descend into chaos. And Israel would cease to exist incidentally.

  10. says

    Thanks for putting all of those sites in one place. I’ve used a couple before, but I find them handy every now and then.

    As for the spending, I don’t mind how much it is – but more how wasteful it is. My family is full of high-up mucky-muck defense contractors, and they tell me so many stories of BILLIONS wasted because of government incompetence in contract management and procurement.

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