Published On: Mon, Nov 25th, 2019

What is the Purpose of Income Taxes

Income taxes are used by the federal government to fund a number of different aspects of the economy and national infrastructure, including paying off national debt. The money collected by the federal government is redistributed throughout many portions of society, including the welfare programs and education and research facilities.

Center on Budget and Policy Priorities Study on Income Taxes

The Center on Budget and Policy Priorities (CBPP) is a research group that focuses on federal financial issues, Congressional actions, environmental policy and other political and scientific matters. The CBPP puts out a report on the distribution of money collected for federal income tax.

National Debt and Income Taxes

According to the CBPP, about 8% of the income tax collected in 2008 was used to pay off interest on federal debt. The debt of the country accrues interest every year, and a portion of collected income taxes are put towards controlling that debt. The United States debt had surpassed $12 trillion at the beginning of 2010.

Do Income Taxes Fund Welfare?

A portion of income taxes go toward funding and maintaining the welfare state; this includes unemployment insurance, school means for children and other safety net programs. Some of these other programs include food stamps, low-income housing assistance, literacy programs and childcare assistance.

These welfare programs are designed to help individuals begin earning a steady income in an effort to stop relying on the aid of government funds. Literacy programs and assistance with childcare and housing are especially beneficial portions of the welfare programs.

National Defense Budget and Income Taxes

In 2008, nearly a quarter of the $625 billion dollars collected from federal income taxes was put towards funding the national defense budget, according to the CBPP. National defense includes funding the Department of Defense, as well as supporting military actions overseas, such as the American presence in Afghanistan and Iraq.

What is the Purpose of Income Taxes

Social Security Program

The Social Security program is a recipient nearly another quarter of income tax payments in 2008. The money collected through Social Security is used to provide financial security for the elderly and retired individuals. Portions of the money also go to the families of deceased individuals, as well as disabled workers.

Income Taxes and Education: No Child Left Behind

A small percentage of income tax collections are used to fund education around the country. According to a speech given by President Obama in March of 2010, he intends to use more income tax funds to dismantle and replace the No Child Left Behind program. Although the United States spends more on education than almost any other country in the world, the educational system is much lower on international standards. (Source: NPR)

Other Uses of Income Tax

Small percentages of the billions of dollars collected through income tax are used in repairing and maintaining the infrastructure of the nation’s roads and public buildings, as well as national parks and other national landmarks and monuments.

Scientific research and grants are funded through the use of income taxes. Benefits for retired military personnel and federal employees are also funded through income taxes.

Income taxes represent an enormous portion of federal funding, and the division of use for those funds is often heavily weighted towards reducing national debt and funding national security. Additionally, there is frequently debate over the future of the social security system and its relationship to income tax funds.

About the Author

- I am an internet marketing expert with an experience of 8 years.My hobbies are SEO,Content services and reading ebooks.I am founder of SRJ News,Tech Preview and Daily Posts.

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