Getting a reality check on taxes and perspective

I had some time at the airport today so I put together these charts of how we think our tax dollars are spent, compared to how they actually are, with Kenya thrown in for a bit of real perspective.

From XKCD – the fraction of our daily earnings that state, local, and federal government takes. One green box is one dollar.

Now, before I reveal what these taxes really buy, here are two contrasting perceptions on where people think taxes go:

Liberals and progressives think…

Where progressives and liberals think our combined local, state, and federal budget goes.

What conservatives believe…

Conservative perception of what our local, state, and federal budget goes towards.

Where our taxes actually go (as best as I can tell):

Where the $32 you give the government (state, local, and federal combined) from a day’s work actually goes.

Compare this with the liberal ideal budget:

And the libertarian “small government” ideal budget:

This is a “moderate” Libertarian model, with a Steve Forbes style 10 percent flat tax and retaining minimal public services and some form of federal tax structure.

I have to say that the libertarian ideal budget looks elegant, symmetrical, balanced in terms of services. However, you can’t really get a feel for what’s missing from this picture until you look at a real libertarian government – which would describe most African governments, but I’ll use Kenya as an example:

Kenya, 2010 per capita income and taxes:

Kenya household income and government taxes, 2010

 

Kenya’s taxes are better visualized using pennies (yellow) instead of dollars (green). For one day’s median pay in Kenya ($2.18), a citizen gives $0.57 to government, mostly through sales taxes and import duties:

57 cents of each Kenyan’s median daily earnings of $2.18 goes to the Kenyan government.

So what do these taxes buy a Kenyan?

Not a whole lot. And I have a suspicion that Kenya’s minimal (libertarian style) government is related to all that red – government waste in the form of corruption. Also note that the US provides a huge subsidy to Kenya’s healthcare system, but this doesn’t even register as a blip on the USA budget. Foreign aid is less than 0.1% of the budget.

We’re missing the point: National Debt ballooning!

I wanted to add in the US national debt to these pictures, but it would require drawing another 92 boxes, and I got tied. But coloring in a box one color or the other in our annual budget is thinking very small when we will owe as much as 20% of the whole budget in interest by 2020.