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What the Government Does With Our Tax Money

Updated on January 22, 2012

What the Government Does With Our Tax Money

We have more taxes than ever before. Is the government even giving us more services or better services than before, or is it just more burden? Are we safer than before or do we live in a dangerous time? What does the government really do with our tax money? Here’s a list of all the big taxes and what they do with it.

Federal Income Tax

This tax is originally illegal according to the U.S. Constitution and it is also the primary reason we had the Revolutionary War, which we may have another one in a few years. I believe this tax is still unconstitutional today, but congress signed it into law. They say this money is distributed to the poor, to even out the wealth in the country. However, what the government does with 99% of this money is using it for wars, occupying other countries, and paying politicians. Once again, this tax is unconstitutional and immoral. We need to eliminate this tax immediately.

Corporate Tax

A corporate tax is just like the Income Tax, but on corporations instead of individuals. This is unconstitutional and immoral since it’s basically enslaving you because you have to pay a [big] portion of your labor to someone for no good reason. We need to get rid of this tax because it’s unconstitutional, immoral, and bad for the economy. If corporations and individuals weren’t taxed on their earnings/income, then they would be able to reinvest and grow the economy. Society would also advance much faster without these 2 taxes.

Social Security Tax

This tax is meant to give us an income when we retire. However, the government does not invest any of this money. In fact, they borrowed and already spent most of this money on wars and the bureaucrats. What they do now is to take more money from the young workers and pay the baby boomers with this money. This is pretty much a Ponzi scheme (a giant pyramid scheme). Anyone who retires after 2035 will have no Social Security income or will have a super inflated one that’s practically useless. The government needs to let people opt out of Social Security and allow people choose how they want to invest for their retirement.

Medicare Tax

This tax is meant to give you health insurance when you retire. However, with all the drug companies and health insurance companies lobbying the government, healthcare has gone up through the roof. They are able to lobby the government since Medicare is a governmental program, which means the government will pay any amount for medical fees. If you retire in 2035 or later, your Medicare will either run out or it will not be able to purchase you the same healthcare. The government needs to stay out of the healthcare business and let people opt out of Medicare. Let people choose whatever health insurance they want to buy from.

State Tax

The state tax is somewhat constitutional and actually does some service for the people. This money is collected from your income in most states and is used to give services to the residents in the state. Usually if you have a state tax then you have no sales tax, but you can have both since the government is so inefficient. This tax can stay.

Sales Tax

This tax is collected when you buy a product or service from someone. This tax is constitutional since it protects people to do business. Usually if you have a sales tax you have no state tax. This money is somewhat put to good use to help the state provide services to its residents. This tax can stay.

Property Tax

This tax is constitutional since it is collected to protect people and their property. Most of this money is put to good use and this tax should stay.

Inheritance Tax

The inheritance tax is collected when someone dies and gives you their wealth. This is a ridiculous tax. It shows how greedy the bureaucrats are, since people aren’t even allowed to give money to their descents for free. This tax needs to go away or people will never be able to R.I.P.

Inflation Tax

This is the biggest and worst tax of all because most people don’t even realize they’re being taxed. Ron Paul calls this the ‘invisible tax’. The inflation tax is about 20% annually starting in 2008 if you use the old definition of inflation (inflating of the money supply and not the new definition meaning inflating of the prices). This tax is collected by the Federal Reserve printing money for useless wars, bailing out (or rewarding) bad companies, and wasting it on welfare programs which only make people worse off. This tax should be the first one and definitely the one we NEED to get rid of. If we don’t get rid of this tax, the U.S. will definitely collapse like the Soviet Union before the end of 2015.

Which Tax Do You Hate the Most?

See results

Ron Paul: 0% Income Tax, 0% Inflation Tax

Bernanke: "Inflation is a tax"


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    • grinnin1 profile image


      6 years ago from st louis,mo

      You are so right. As someone who opened a small business and was buried alive in taxes, I agree there should be some huge changes. Our country would be much better off if small businesses were rewarded instead of punished and if the American people had more of a direct say in where their taxes went. Thanks for writing-voted up!

    • iamageniuster profile imageAUTHOR


      6 years ago

      I completely agree.

    • pinto2011 profile image


      6 years ago from New Delhi, India

      A great article. I think our politicians and law makers should open up and go through the above tax before burdening ourselves and making us tax slaves. I am a strong believer of your above thought.


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