What Your Tax Dollars Do For You

Posted by Nick Niesen on November 8th, 2010

In this article, we will take a look at the influence the government exerts over our daily lives through our taxation, and the good and bad aspects of that influence.

Through direct spending, the U.S. government controls approximately 43-45% of the economy. Today, government spending accounts for almost as much of the economy as spending in the private sector. After the passage of the New Deal legislation, during the late 1930s, the private sector controlled almost 90% of the economy. We have experienced quite a huge change in the last 2 generations. The average American remits about 5.3 months of his or her work year in order to support government spending.

The American economy is separated into two sectors: there is one that is dependent upon federal, state, and local government spending, known as the public sector; all others known as the private sector. The private business sector is funded by tax dollars collected from Americans. What the government decides to spend and allocate is primarily funded by our tax dollars.

Government spending controls $5.4 trillion dollars of the total spending, and when you figure in the $1.4 trillion government-forced spending, the government actually controls somewhere near 58% of the economy?s national income. That is a 3.5 times increase from a hundred years ago. And the economy has been in a steady decline. The ability of private sector growth to increase has been reduced over time, thanks to the fact that the government largely governs even private sector business.

Increased government control gets a big boost from the special interest groups, and the capability of big corporate entities to lobby Congress for programs and funding, as well as changes in tax laws that benefit them alone. In addition, government-funded welfare and public assistance programs are a major contributor to the government spending programs.

The problems with government spending are not going to end anytime soon. This isn?t what our forefathers had it in mind when they broke free of oppressive British rule and penned the Declaration of Independence. Without major reforms, in the near future, we will see our children paying $25,000 each year to support an overburdened and imperious government.