Spending on national defense has declined as a share of the economy since 1962. In contrast, non-defense spending has soared, increasing due to the unsustainable growth of social benefit programs. In 2020, non-defense federal spending hit a record of 26 percent of GDP.
Updated March 28, 2024
Source: Office of Management and Budget
Social Security’s shortfall has more than tripled since 2010. Filling the gap with revenue would require a 3.3 percentage point increase in the payroll tax, which would mean thousands of dollars in additional taxes each year for middle-class households. Congressional failure to address the unsustainable growth in spending means that Social Security solvency becomes much harder to reach with each passing year.
Updated July 19, 2024
Source: Social Security Administration
In European welfare states, middle-class workers—not just the wealthy—shoulder a massive tax burden and get a highly intrusive government for their money. A lower-income European earning $40,000 pays $6,000 more in taxes than a similar American. On the current fiscal course, Americans will face European-style taxes.
Created November 8, 2019
Source: Heritage Foundation Analysis
While the current national debt of $33.6 trillion is deeply concerning, Americans should be equally worried about the gap between future tax revenues and promised benefits for Social Security and Medicare, which exceeds $75 trillion.
Additional Sources: Treasury Department, Centers for Medicare & Medicaid Services.
Updated October 24, 2023
Source: Social Security Administration
Interest payments for the national debt are a two-fold problem. First, today’s interest rates are far below historical averages, and expected increases will cost hundreds of billions of dollars per year. Second, chronic high deficits are causing debt to grow faster than the economy. The combined effect will eventually cause interest payments to consume 6.5% of the economy per year. Elected officials have a responsibility to end deficit spending and avoid the mounting fiscal crisis.
Updated February 8, 2024
Source: Congressional Budget Office
State and local government spending imposes a significant additional burden on taxpayers, on top of federal spending. Even after adjusting for inflation, combined per-person government spending has more than quadrupled since the mid-1960s.
Additional Sources: U.S. Census Bureau, St. Louis Federal Reserve.
Updated August 31, 2023
Source: Office of Management and Budget
Additional Sources: U.S. Census Bureau, St. Louis Federal Reserve.
Updated August 31, 2023
Source: Congressional Budget Office
In 2019, Tax Freedom Day—the day after which Americans have worked enough days of the year to pay their federal, state, and local taxes—occurs just one day after Tax Day, April 15, the deadline for filing federal tax returns. According to the Tax Foundation’s annual “Tax Freedom Day” report, Americans will work for 105 days of the year to pay their collective $5.42 trillion tax bill—a figure equal to about 29% of Americans’ incomes.
