How much does the US federal government spend?

Total federal spending for FY2024 was approximately $6.75 trillion, covering all mandatory and discretionary programs.

Where does most US tax money go?

The largest share goes to Social Security at $1.46 trillion (21.6¢ per dollar), followed by Medicare at $874 billion (12.9¢ per dollar) and National Defense at $874 billion (12.9¢ per dollar).

What is the US budget deficit?

The federal budget deficit for FY2024 was approximately $1.83 trillion — the difference between $6.75 trillion in spending and $4.92 trillion in revenue.

Where Does Your Tax Dollar Go?

Total federal spending for FY2024: $6.75 trillion

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Total Spending

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Total Revenue

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Budget Deficit

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National Debt

Tax Filers

For Every $1 of Federal Spending

Here's how each dollar is divided across programs and services

Where the Money Comes From

Federal revenue sources FY2024

Understanding the Federal Budget

A plain-English guide to where your tax dollars actually go

Every year, the US federal government spends roughly $6.75 trillion. That's $6,750,000,000,000 — more than the entire GDP of every country on Earth except the US and China. It funds everything from Social Security checks to aircraft carriers, from interstate highways to the International Space Station.

The government collects about $4.92 trillion in revenue, mostly through income taxes and payroll taxes. The difference — approximately $1.83 trillion — is the annual budget deficit, added to a national debt that now exceeds $35 trillion. Understanding these numbers is the first step to having an informed opinion about tax policy and government priorities.

Mandatory vs. Discretionary Spending

Federal spending falls into two fundamentally different categories:

Mandatory spending (~63% of the budget) — programs that run on autopilot, written into law. Social Security, Medicare, Medicaid, and other entitlement programs automatically pay out to everyone who qualifies. Congress doesn't vote on these amounts each year — they're determined by the number of eligible recipients and benefit formulas. Changing mandatory spending requires changing the underlying law.
Discretionary spending (~27% of the budget) — programs that Congress actively funds through annual appropriations bills. This includes defense, education, transportation, scientific research, and most of what people think of as "the government." This is what Congress debates and votes on each year during the budget process.
Interest on the debt (~13%) — the cost of servicing $35 trillion in accumulated borrowing. This is effectively non-negotiable — the government must pay its creditors.

Why Does This Matter?

When politicians debate "cutting government spending," the math gets uncomfortable fast. Over 75% of the budget is either mandatory programs that millions depend on or interest payments that can't be skipped. The entire discretionary budget — including the entire military — is only about a quarter of total spending. Understanding this structure is essential to evaluating any proposal to balance the budget, cut taxes, or expand programs.

How to Read Your Tax Receipt

Making sense of the numbers

When you enter your salary above, we calculate your approximate federal income tax and FICA contributions (Social Security + Medicare taxes) using the 2024 rates. We then divide your total federal tax payment across spending categories, proportional to how the overall budget is allocated.

Understanding Federal Income Tax

The US uses a progressive tax system with seven brackets. You don't pay one flat rate on all your income — each bracket only applies to the income within that range:

Standard Deduction: $14,600 (single) or $29,200 (married filing jointly) is tax-free
10%: First $11,600 of taxable income
12%: $11,601 to $47,150
22%: $47,151 to $100,525
24%: $100,526 to $191,950
32%: $191,951 to $243,725
35%: $243,726 to $609,350
37%: Over $609,350

Someone earning $75,000 has a taxable income of $60,400 (after the standard deduction). Their effective federal income tax rate is roughly 10-12%, even though their "bracket" is 22%.

What is FICA?

FICA stands for the Federal Insurance Contributions Act. It's the payroll tax that funds Social Security and Medicare:

Social Security: 6.2% on earnings up to $168,600 (the "wage base" for 2024). Your employer pays an additional 6.2%.
Medicare: 1.45% on all earnings, with an additional 0.9% on earnings above $200,000. Your employer matches the base 1.45%.

Unlike income tax, FICA has no standard deduction — it applies from the first dollar you earn. For many middle-income workers, FICA is actually a larger tax burden than federal income tax.

The Per-Dollar Breakdown

The "per dollar" figures show how each $1 of federal spending is allocated. If 21.6¢ goes to Social Security, that means 21.6% of total federal spending funds Social Security. Your personal receipt shows the approximate dollar amount of "your" taxes allocated to each program — though in practice, tax revenue isn't earmarked (with the partial exception of payroll taxes, which are formally designated for Social Security and Medicare trust funds).

What About State and Local Taxes?

This site covers federal taxes only. Most Americans also pay state income tax (rates vary from 0% to 13.3%), local property taxes, state and local sales taxes, and various fees. Total state and local government spending adds roughly another $3.5 trillion. The combined tax burden varies enormously by state — a resident of Texas (no state income tax) has a very different experience than one in California or New York.

Where the Money Goes: Program by Program

What each area of federal spending actually pays for

👴 Social Security — $1.46 trillion (21.6¢ per $1)

Social Security is the single largest federal program and the primary source of retirement income for most Americans. It pays monthly benefits to roughly 67 million people: retirees (the largest group), disabled workers, and survivors of deceased workers. The average retirement benefit is about $1,900/month. Social Security is funded primarily through the 12.4% payroll tax (split between employee and employer) and its trust fund reserves. However, the program is paying out more than it collects — the Social Security Trust Fund is projected to be depleted around 2033, after which benefits would automatically be cut by about 23% unless Congress acts. This is the single most consequential fiscal challenge facing the US government.

Medicare — $874 billion (12.9¢ per $1)

Medicare provides health insurance to about 67 million Americans aged 65+, plus younger people with certain disabilities. It has four parts: Part A (hospital insurance, funded mainly by payroll taxes), Part B (outpatient and doctor visits, funded by premiums and general revenue), Part C (Medicare Advantage — private plans that cover A and B), and Part D (prescription drug coverage). The Inflation Reduction Act of 2022 introduced drug price negotiation for some Medicare drugs, with the first negotiated prices taking effect in 2026. Medicare costs are a major driver of long-term federal spending growth, as the population ages and healthcare costs rise.

🎖️ National Defense — $874 billion (12.9¢ per $1)

The Department of Defense budget funds the Army, Navy, Marine Corps, Air Force, and Space Force, along with massive procurement programs (fighter jets, aircraft carriers, satellites), research and development, military construction, and the nuclear arsenal maintained by the Department of Energy. The US spends more on defense than the next 10 countries combined. Major ongoing programs include the F-35 Joint Strike Fighter (the most expensive weapons system in history), the Columbia-class ballistic missile submarine, and the B-21 Raider stealth bomber. This figure doesn't include veterans' benefits (separate category) or intelligence agencies like the CIA (classified budget, estimated at ~$70 billion).

🏨 Medicaid — $616 billion (9.1¢ per $1)

Medicaid is a joint federal-state program providing health coverage to low-income Americans — roughly 90 million people, making it the nation's largest health insurer by enrollment. It covers children, pregnant women, elderly nursing home residents, and people with disabilities. The federal government pays 50-77% of costs depending on the state (poorer states get a higher match). The Affordable Care Act expanded Medicaid to cover more low-income adults, though 10 states have not adopted the expansion. Medicaid is the largest source of federal funding to states and the primary payer for long-term nursing home care in America.

💳 Interest on the National Debt — $882 billion (13.1¢ per $1)

This is the cost of servicing $35 trillion in accumulated federal debt — essentially interest payments to bondholders (pension funds, foreign governments, individual investors, and the Federal Reserve). At $882 billion, net interest now exceeds the entire defense budget for the first time in modern history. Interest costs are driven by two factors: the size of the debt (which keeps growing with annual deficits) and interest rates (which rose sharply in 2022-2024 as the Federal Reserve fought inflation). If rates remain elevated, interest costs could consume an ever-larger share of the budget, crowding out other priorities. This is money that buys no services — it simply pays for past borrowing.

🎖️ Veterans Benefits — $235 billion (3.5¢ per $1)

The Department of Veterans Affairs serves about 18 million living veterans. Spending covers disability compensation (the largest component, for service-connected injuries and illnesses), the VA healthcare system (the nation's largest integrated health system, with 171 medical centres), education benefits (the GI Bill), pension programs, and home loan guarantees. The PACT Act of 2022 significantly expanded benefits for veterans exposed to burn pits and toxic substances, adding an estimated $280 billion in spending over the next decade. Veterans' healthcare has been a persistent political issue, with concerns about wait times and quality driving reforms.

🛟 Income Security — $415 billion (6.1¢ per $1)

This category covers the federal safety net beyond Social Security: SNAP (food stamps, serving about 42 million people), the Earned Income Tax Credit (a tax refund for low-income workers — one of the largest anti-poverty programs), the Child Tax Credit, unemployment insurance, housing assistance (Section 8 vouchers and public housing), and other welfare programs. The pandemic saw massive temporary expansions of these programs (enhanced unemployment benefits, expanded Child Tax Credit), most of which have expired. SNAP alone costs about $112 billion per year.

📚 Education — $188 billion (2.8¢ per $1)

Federal education spending funds Pell Grants (financial aid for low-income college students), Title I funding for high-poverty K-12 schools, special education support under IDEA, Head Start (early childhood education), and the federal student loan program. However, the federal government funds only about 8% of K-12 education costs — the vast majority comes from state and local taxes. The student loan portfolio is a major fiscal issue: the government holds over $1.6 trillion in student loans, and various forgiveness initiatives have significant budgetary implications.

Transportation — $126 billion (1.9¢ per $1)

Federal transportation spending funds the Interstate Highway System (through the Highway Trust Fund), Amtrak subsidies, aviation (the FAA and airport grants), transit systems, and maritime programs. The 2021 Infrastructure Investment and Jobs Act added $550 billion in new infrastructure spending over five years, including for roads, bridges, broadband internet, electric vehicle charging stations, and rail. The Highway Trust Fund, primarily funded by the 18.4¢/gallon federal gas tax (unchanged since 1993), has required general fund transfers to remain solvent as fuel-efficient vehicles reduce gas tax revenue.

🌍 International Affairs — $68 billion (1.0¢ per $1)

This covers the State Department, USAID (foreign development assistance), embassy operations, international peacekeeping contributions, and foreign military aid. The US is the world's largest foreign aid donor in absolute terms (about $60 billion/year), though as a share of GDP (0.22%), it ranks below most other wealthy nations. Major recipients include Ukraine (military and economic support), Israel, Egypt, Jordan, and various African nations. International affairs is one of the most commonly targeted areas for budget cuts, despite being barely 1% of total spending.

Frequently Asked Questions

Common questions about federal taxes and spending

How is federal income tax calculated?

Federal income tax uses progressive brackets — you pay a higher rate only on income above each threshold, not on your entire income. First, you subtract the standard deduction ($14,600 for single filers in 2024) from your gross income. The remaining "taxable income" is then taxed through seven brackets ranging from 10% to 37%. This means your effective tax rate (total tax ÷ total income) is always lower than your marginal bracket. Someone in the "22% bracket" might actually pay an effective rate of 10-12%. Tax credits (like the Child Tax Credit) directly reduce your tax bill, while deductions (like mortgage interest) reduce your taxable income.

What is FICA and why is it separate from income tax?

FICA (Federal Insurance Contributions Act) taxes fund Social Security and Medicare specifically. Unlike income tax, FICA applies from the first dollar of earned income with no standard deduction. The Social Security portion (6.2%) only applies up to $168,600 in 2024 — income above that isn't subject to Social Security tax, which is why critics call it a regressive tax. Medicare tax (1.45%) applies to all earnings, with a 0.9% surcharge above $200,000. Your employer matches both taxes, meaning the total payroll tax burden is 15.3% of wages. Self-employed individuals pay the full 15.3% themselves (the "self-employment tax").

Where does most of my tax money go?

The three largest items are Social Security (21.6¢ of every dollar), Interest on the Debt (13.1¢), and Medicare and National Defense (tied at 12.9¢ each). Together, just these four items consume over 60 cents of every federal dollar. Add Medicaid (9.1¢) and income security programs (6.1¢), and mandatory spending plus interest accounts for over 75% of the total budget. This is why balancing the budget through discretionary cuts alone is mathematically impossible.

Why does the government run a deficit?

The federal government spends $6.75 trillion but collects only $4.92 trillion, creating a $1.83 trillion annual deficit. This deficit is financed by issuing Treasury bonds — debt instruments bought by investors, pension funds, foreign governments (Japan and China are the largest foreign holders), and the Federal Reserve. The US has run a deficit in all but four years since 1970 (the surpluses of 1998-2001). Deficits expanded dramatically during the 2008 financial crisis, the COVID-19 pandemic, and remain elevated due to rising mandatory spending and interest costs. The national debt now exceeds $35 trillion, or roughly $105,000 per American.

Is the national debt a problem?

Economists disagree on this. The debt-to-GDP ratio (about 120%) is the highest since World War II. Optimists note that the US borrows in its own currency, Treasury bonds are considered the world's safest investment, and interest rates remain manageable relative to GDP. Pessimists argue that rising interest costs (now exceeding $880 billion/year) are crowding out other spending, and that an ageing population will make mandatory spending grow faster than revenue for decades. Most agree that the trajectory — ever-rising debt with no plan to stabilize it — is the real concern, even if the current level is sustainable.

How does US spending compare to other countries?

Federal spending is about 24% of GDP, but total government spending (including state and local) is roughly 36% — lower than most European countries (France: 57%, Germany: 49%, UK: 44%) but higher than many Asian economies. The US spends far more on defense (3.4% of GDP) and healthcare (17% of GDP across public and private) than peer nations, but less on social safety nets. The US is unique among wealthy nations in not having universal healthcare, universal paid family leave, or universal childcare — though programs like Medicare and Medicaid provide partial coverage.

Are the figures on this site exact?

Spending and revenue figures are based on CBO estimates and Treasury data for Fiscal Year 2024 (October 2023 – September 2024). Some sub-category breakdowns are approximations based on departmental data. The personal tax calculator uses simplified assumptions: single filer, standard deduction, employment income only. It doesn't account for state taxes, tax credits beyond the standard deduction, retirement contributions, or other factors that affect your actual tax bill. For precise calculations, consult a tax professional or use IRS resources.

About American Dollar Story

American Dollar Story is an independent, non-partisan public data project. We believe every taxpayer deserves to understand how their money is spent — clearly, accurately, and without political spin from either side of the aisle.

Federal budget data is publicly available, but it's typically buried in thousand-page CBO reports, Treasury spreadsheets, and OMB documents that most people will never read. This site translates that data into interactive visualizations that make the big picture intuitive and the details explorable.

Our Data Sources

Congressional Budget Office (CBO) — Budget and Economic Outlook provides spending and revenue projections
US Treasury — Monthly Treasury Statement provides actual spending and revenue data
Office of Management and Budget (OMB) — President's Budget provides detailed departmental spending data
IRS — Tax statistics and bracket information
Social Security Administration — Trust fund reports and beneficiary data

Methodology

Spending figures represent total federal outlays for Fiscal Year 2024 (October 2023 through September 2024). Categories are based on CBO's functional classification of the budget. Sub-program breakdowns in the Sankey diagrams are approximations based on agency budgets and CBO analysis.

The personal tax calculator uses 2024 federal income tax brackets and FICA rates. It assumes a single filer with standard deduction and employment income only. It does not calculate state income tax, Alternative Minimum Tax (AMT), Net Investment Income Tax, or factor in credits and deductions beyond the standard deduction. Actual tax liability may differ significantly.

Revenue figures are based on Treasury actual data for FY2024. All figures are in nominal dollars (not inflation-adjusted).

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