Ever wonder how much money you’re giving ol’ Uncle Sam? We thought it would be fun to calculate the amount you will pay in federal taxes over your lifetime, and show you where that money goes. Unfortunately, the IRS wouldn't give us access to everyone's tax records, so we built this calculator instead. Submit a sample salary and we'll do the math.
Annual tax breakdown
Based on your salary, your annual tax payment to the Federal Government is probably around: $0
of your salary goes to the Federal Government.
And is broken down into three categories:
- Medicare 0%
- Social security %
- Income taxes 0%
Projection over 35 years
Now, let’s aggregate that over the next 35 years to find out approximately how much you’ll pay to the Federal Government over your working life, as well as the potential opportunity cost.
- Medicare $0
- Social security $
- Income taxes $0
What is opportunity cost?
The cost of an item isn't just what you pay out of pocket, but also the loss of other alternatives. Let's say instead of paying taxes, you invested that money every year for an average rate of return of 5% annually. After 15 or 20 years, it turns into a significant yearly income. Think of all the burritos you could buy!
Breakdown of spending
Depressing, right? It’s probably best not to think about that. Afterall, nothing in life is certain except death and taxes (said someone on the internet). So where does all that money go? Taking the White House tax receipt, we have consolidated how much you contribute to the following government programs every year.
Health care $0
National defense $0
Low income assist. $0
Net interest $0
Veterans benefits $0
Law enforcement $0
Intl. affairs $0
Energy & environ. $0
Science & tech $0
Want more examples?
Let’s get even more specific! These are some recent events that you personally contributed to over the course of the last ten years. And you thought that you don’t make a difference!
Spanning over 10 years, the Iraq War cost the US a total of $3 trillion. Over the course of the war, you contributed:$0
Remember the huge loan we gave Wall Street a few years back? We sure do! You generously loaned the banks:$0
The Affordable Care Act will add $140 billion in new administrative costs per year, your annual portion will be:$0
And how about that election?
We started building this tool before election day (which now feels like ages ago). The numbers below reflect the impact of each candidate's proposed tax plan on your monthly take home pay.
While the Donald has filed for Chapter 11, with him now as POTUS, you probably won’t have to. This is how much you'll save a month:
Barring an enormous raise, you would payed about the same with Hillary in the White House.
Just for kicks, this is how much more you would have paid under everyone’s favorite Democratic Socialist:
Cool, taxes suck. Now what?
Well, there’s not much you can do. And not all taxes suck if they’re being used to fund programs that you support. Don’t worry, this isn’t a site that was built to sell you anything. Just purely informational. But if you want to share it, we won’t object! Don’t those buttons just look so clickable?
We’re Kat, Srdjan and Sajad, and when we’re not arguing over the intricacies of internet etiquette or gender stereotypes, we like to make pretty things that help people navigate complexity.
Sajad does the conceptual and math stuff. If there are any mistakes or if you want to share your favorite smutty haiku, you can email him at email@example.com, but he's currently hiding from people in the Amazon, so he might take a week or so to respond.
Kat does the design stuff. If you like her work, you can email her at firstname.lastname@example.org, or check out her portfolio at katharinesison.com. When she’s not busy binging Netflix shows, she spends her time in overpriced coffee shops working / people watching, so she will definitely get your email.
Srdjan does the coding and server stuff. When he's not finding brilliant solutions to Kat's inexhaustible list of design changes and features additions, he can be found hanging out with his family. Need help building out some awesome web app? If so, then you should email him at email@example.com.
If you have questions, complaints, or would just like to share a picture of a cute baby animal, email us at firstname.lastname@example.org.
You are freaking awesome.
Why? Cause you’re checking the math and the sources. You, madam or sir, are naturally skeptical about believing what some anonymous putz says about finance and taxes on the internet. You’re the type of person I would like to meet and drunkenly debate with at some random house party.
So, let's get into the juicy stuff! I’ll start with the easy math, then dive into the more assumption based pieces, and finally, if struck by inspiration, I’ll try to conclude with a smutty haiku.
The easy stuff
Income, Social Security and Medicare were all derived from the 2016 tax rates. Medicare is 1.45%, Social Security is 6.2% for income up to $118,500. I went with Head of Household for Federal Income Tax using the brackets listed here: link.
If I wanted to be super honest and slightly more aggressive, I would include employer contributions for all three of the above taxes, as those are actually paid by the employee even if we don’t realize it. (Econ 1B in the house!)
Also, as a fun Friday night activity, you should try to compare the projected per person spends on Social Security and Medicare versus the lifetime income generated at a few different income levels (clears throat nervously).
Opportunity cost is just a 5% compound interest calculation on the aggregate yearly tax payments. I mainly included this section to broach the general idea of Opportunity Cost.
The life time contribution was derived from the White House tax receipt.
A big thank you to taxfoundation.com for aggregating. You saved me from having to slum through the campaign websites.
The hand wavy stuff & assumtion based stuff
We built this whole thing to showcase an idea: taxes cost you a lot of money over your lifetime. In doing so, I made some generalizations. With that said, I tried really hard not to amputate any of the important and sexy stuff.
First, your salary isn't gonna stay constant over 35 years. It’s most likely going to grow (unless you're a journalist, then you're sorta fucked). But I didn't have any good way of modeling the change. I thought about asking for your age and then doing some some kind probability distribution based on IRS data, but the margin of error was too large.
Second, we didn't include State Tax, Sales Tax, Property Tax, Not Having Health Care Tax, City Tax, Cat Tax (google it), Capital Gains Tax, Being Alive Tax, Not Being Alive Tax... you get the point. We wanted to, but it would have been a lot of work. And you know, we aren't making any money off this, so yeah.
And finally the example section. Guessing this is where people’s hackles might raise; I promise that no offense is intended towards your personal political dogma or shibboleth.
I used the Joseph Stiglitz (link) analysis for the total cost of the Iraq War. To figure out the percentage, I took the aggregate annual tax contribution over the 8 years of the war, as a percentage of the total federal budget, and then applied that same ratio against the total cost of the war.
For the Bailout, I took the combination of all the monies set aside for TARP, AIG, and Bear Stearns ($789B), then ran the users annual Tax Contribution for 2008 against the total federal budget, applying the same ratio against the aggregate fund created to save the Wall Street.
The total annual administrative cost for ACA came from the following report (link). I then did the whole ‘annual tax contribution versus total federal budget’ to figure out the ratio.
Also, I know there are several concerns with the above methodology--compounding bias based on several layered assumptions. But, I tried to make it as simple and as clean as possible while preserving the general idea that we as citizens are the ones who pay for the decisions of our elected officials.
I honestly don't think anyone will actually read to this point. Also, Kat wanted the explanation section to be more professional, but since it doesn't really have any design in it, I got to veto her (Ha!).
If you have any comments or complaints, email me. I'll read it. I'll respond. Unless your email is absurd, then I'll just probably respond with a picture of cute baby animal (probably an otter, you'll most likely get a picture of a floating baby otter). My email is email@example.com.
Also, I travel a lot, cause I am basically homeless. At some point I'll probably be roaming through your town. So if while reading this you thought in your head, damn this guy is pretty awesome, then you should email me and we can grab a beer. I am totally serious!
And finally, the part you were really waiting for... the smutty Haiku:
sweat soaked leather cuffs
your moans muffled through the pillow
all else finds silence