Ever wonder what you're actually buying when you pay your taxes?

💵Use our calculator to create a personalized summary + 🎵 playlists for tax-prep

Apr 13, 2024

In the US, federal income taxes are due Monday, April 15. If you’ve already filed, good for you. Many others — yours truly included — will be spending some of this weekend working on taxes (how to file for an extension).

If you’re among the 46% of my readers who are outside the US, this would be a great week to catch up on any issues you may have missed in the archive or check out one of the most popular issues. You may also find the issue below of interest, too.

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a sign that says pay your tax now here — Photo by The New York Public Library on Unsplash

I’ve often wondered if people would feel better about paying taxes if it was more apparent what you are buying with your hard-earned money. You know, kind of like a nutrition label.

As it happens, Visual Capitalist published this visual earlier this week:

A chart breaking down what all programs U.S. federal taxes fund. — Source: Visual Capitalist.

It’s great for seeing the relative proportions of various government services, but what I’ve always wanted is a customized invoice that says: here’s what your taxes are paying for this year.

So I set out to build one for us.

First, I had to track down the federal budget1:

Table prepared by author based on FY2024 budget information from USASpending.gov.

Next, I tracked down the federal income taxes paid from FRED (St. Louis Federal Reserve) for each income quintile (lowest 20%, 21-40%, 41-60%, 61-80%, and highest 20%) and created this table.

Table prepared by author using information FY2024 budget information from USASpending.gov and federal income taxes by quintiles of income from FRED.

Finally, I created a quick calculator in Excel that you can use to create a personalized summary of what you are buying with your taxes this year. Here is what it looks like:

You can access it and easily create your own personalized summary here:

Calculator See Where Your Us Federal Income Taxes Go

22.5KB ∙ XLSX file

Download

I hope you find this helpful. If you did, please feel free to share with others who might appreciate this first attempt at a more user-centered approach to tax bills. (I’d like to do more, much more, but taxes call so that will have to wait for another day…)

I welcome any feedback you may have and, together, maybe we can start a movement towards government providing a clear accounting of the services we individually and collectively use and support.

🎵Media Embed: Music for Taxes

If you’re going to be spending some quality time with TurboTax or reviewing what your CPA prepared, I’ve got a soundtrack for you this weekend.

Here is the playlist your CPA might be listening to this weekend (it’s published by none other than the American Institute of Certified Public Accountants (AICPA)):

If you’re preparing your own taxes, here’s a Spotify playlist for you:

Apple Music has a playlist called Tax Season Pop. Even iHeart has a Tax Day playlist.

Who knew tax-prep playlists were a thing?

Happy filing!

I hope you have a lovely weekend whatever you do.

Be well,

-Bryce

Note: “All dollar amounts shown here represent agency reported obligated amounts” whereas the dataset Visual Capitalist used reflects “money that is actually paid out by the government.”