Alarming Trend of US Government's Addiction to Spending and Taxing

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A recent data analysis performed by Back Taxes Help LLC on US Government spending and collections shows an alarming increase in average dollars spent and collected on a per person basis (adjusted for inflation) over the last 74 years. This signifies that the government continues to grow larger and controlling more aspects of individual’s lives.

For 2013 it is predicted that the government will spend an average of $7,741 per person on individual payments, which is a 3,616% increase from 1940.

Back Taxes Help LLC has recently performed an in-depth analysis of tax collections and tax spending in the United States over the last 74 years. The findings of this analysis have found some alarming tax collection and spending trends of the United States, even after adjusting for inflation and population increases.

With US population increasing significantly and inflation hitting the US dollar, just about every year, it makes it difficult to compare current government receipts and spending to prior years. By adjusting prior year’s government tax receipts and spending, with inflation figures, while adjusting based on population, a good comparison can be made of government collections and spending today vs. prior years. The results of this analysis point to an alarming increase in reliance on the government for the average individual. This increasing trend requires individuals to continue to pay more tax dollars to the government year after year.

Government Spending and Tax Collections Adjusted for Inflation

Since 1940 the US dollar has inflated close to 1,600%. When the government’s spending and receipts are put into today’s dollars the government spent about $157 billion and collected nearly $109 billion in taxes. Today, the US Government spends 2243% more and collects 2494% more in taxes than it did in 1940, even when taking into consideration the inflation adjustment. The upward trend has been pretty consistent since the 1940s with a few spikes in spending for World War II, Korean War and Vietnam, but there is no denying the upward trend.

Much of this upward trend can be explained simply by population increases. With a greater population comes more individuals earning wages, paying taxes and receiving government benefits. In order to get a better picture of a comparison the figures must be seen on a per person basis.

Government Spending and Tax Collections per Person

If the government remains consistent since the 1940s with their collection and spending tactics it would be expected to see a fairly flat line from 1940 to the present for government spending and collections on a per person basis. In 1940 the government spent an average of $1,190 on each person and collected an average of $823 from each person (after adjusting for inflation). For 2013 the US Government plans on spending $11,695 and collecting $8,607 per person. This means there was an 883% increase per spending on a per person basis and a 946% increase in taxes collected on a per person basis.

In the 1940s there was a significant spike in Government spending that can be attributed to World War II on national defense and the average inflation adjusted spent per person was $8,716. After the war the spending dropped significantly, but has trended upwards to an amount greater than when the US was involved in major wars.

Historical Government Spending on Defense vs. Non Defense

To get a better view of where the government spends money it is important look at the trend of defense spending vs. non defense spending. In 1945 defense spending made up 89% of US spending during World War II. Since 1945 there has been a steady downward trend of the defense spending percentage. For 2013 it is predicted that only 18% of the US spending will be directed towards defense. Since the mid 1950s the average government spending on a per person basis for defense has remained fairly even, but the non defense spending has increased significantly and steadily since the 1940s.

Government Spending Per Person on Individual Payments

The majority of the spending on non defense is made up of payments to individuals that are made up mainly of health care, Medicare, veteran’s benefits, income security and social security. In 1940 the average spend per person for individual payments was a mere $208, which is adjusted for inflation. In 2013 it is predicted that the government will spend an average of $7,741 per person, which is a 3,616% increase.

These figures show that overtime the government has increased its role in the average US citizen's life by collecting and spending more on a per person basis. This change has come about from pressures from society, economy and wars. Even with no wars, the government has increased it’s spend on a per person basis to a point greater than when the country was at war. This signifies a large increase on spending on various entitlements. The Government continues to control a greater portion of individual’s income to pay for services that they deem necessary for societies benefit. Can this upward trend be sustained? When does it get to a point where individuals will want maintain more control over how they want their money spent? Or are have US citizens become content with letting the government dictate how they spend their hard earned money?

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since: 02/2009
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