Taxes are one of the biggest budget items for most taxpayers, yet many have no idea what they’re getting for their money.
The average household spends more on taxes than on groceries, clothing, or healthcare. In fact, 11% of our income, on average, goes to personal income taxes, which doesn’t include sales tax, property tax, Social Security payments, or Medicare payments. So what do we get in return?1
The accompanying chart breaks down the $6.8 trillion in federal spending for 2024 into major categories. One of the biggest categories is Social Security, which consumes 22% of the budget. Defense takes 13% of the budget, and 13% goes to Medicare.2
Are taxes one of your biggest budget items? Take steps to make sure you’re managing your overall tax bill. Please consult a tax professional for specific information regarding your individual situation.
Pieces of the Federal Pie
Over half of 2024 federal spending was used for Social Security, Medicare, defense, and Medicaid.
Source: CBO.gov, March 20, 2025. Figures represent total outlays for the 2024 fiscal year, as reported by the Congressional Budget Office.