Next Monday is going to be a bit worse than your average start of the week. Americans across the country will be filing out their tax returns as Tax Day was moved from April 15 to April 18. As GW seniors begin to obsess over jobs, this day should serve as a daunting reminder of what we’re getting ourselves into.
As official U.S. income taxpayers, we will soon have a vested interest in how much the government will be taking from us and, more importantly, how it’s being spent. So let’s take a quick look:
In 2009, the average starting salary for a college graduate was about $48,500, according to the National Association of Colleges and Employers. Let’s assume that you are a lucky senior who will land a job immediately after graduation. This will put you, the average graduate, into the $34,000 to $86,000 income bracket, which means the government will tax about 25 percent of your income (after factoring in marginal rates). Every year, about $9,000 of your salary will go to D.C. So in reality, you’ll only be making around $39,500.
You then will have to factor in state taxes. State tax rates vary, but the average state income tax for your bracket will be about 6 percent. There goes an additional $2,900, reducing your disposable income to about $36,60
You’re a bit disappointed the government has taken nearly a third of your hard-earned money. But you keep your head up! You’re confident that at least your taxes are helping to provide vital government services.
Now let’s take a look at your theoretical taxpayer receipt to see where all your money is being spent, according to moderate think tank Third Way’s tax calculator.
One-fifth of your taxes will go toward fulfilling Social Security funding obligations. Another quarter will be going toward similar obligations with Medicare and Medicaid. So a bit less than half of all your taxed income is going toward three unsustainable entitlement programs that you, as a millennial, will either never see or will see in a severely reduced form.
Another fifth of your taxes will go toward the defense budget and a tenth will support low-income assistance programs. Six percent of your taxes will go toward paying down interest on the national debt.
But what about all education spending? Just 2.9 percent of your taxes fund our schools. Our roads? Only 2.3 percent. Environmental programs only get 1 percent, and arts and culture receive just one-tenth of one percent.
The fact that programs we as graduates consider to be vital services only account for around 15 percent of our budget may surprise you. But what does this mean for you, a student about to go into the world, work hard, make a salary and pay taxes?
For starters, you can start to listen to the budget debate raging on Capitol Hill and the fight over entitlement reform that is about to gear up. Social Security and Medicare need to be fixed; otherwise these bloating programs will inhale an increasingly large portion of your tax dollars every year, while all the while the possibility you may eventually see a check from them dwindles.
Perhaps reconsider your opinion of the Bush tax cuts, or what some call “tax cuts for the rich.” As the average college graduate, you may not call yourself rich, yet the Bush tax cuts reduced your own tax rate as well, by 3 percent. Keep that in mind the next time a politician calls to repeal them.
Pay attention to the debt as well. A full 6 percent of your taxes are spent simply paying interest on the national debt. That number will only grow unless serious action is taken.
Mark next Monday as the day to start keeping a closer eye on government spending. As a soon-to-be taxpayer, you now have dice in the game.
Andrew Clark, a senior majoring in political communication, is a Hatchet columnist.