Calculating the Cost of Government

Thursday, September 2, 2010 9:46 AM by Lauren Forbes

Our friends at the Independent Institute launched a website Tuesday that calculates taxpayers’ personal cost of government in terms of the taxes that they will be required to pay given the federal spending burden. According to the Independent Institute, the Government Cost Calculator estimates that the current U.S. national debt of $13.4 trillion will reach $23 trillion by the year 2019.  Federal spending will top $3.5 trillion with $1.4 trillion of that spending financed by debt just this year alone. That is why they offer a service on their website that calculates how much you will pay for various federal programs now and over the course of a lifetime. It then compares those tax payments to the forgone earnings that would have been possible if such funds were kept and invested in private market accounts. Lastly, allows you to see the difference between government expenses and your tax payments, showing what the future of your financial burden.

However, the tax burden really only illustrates part of the story: The Center for Fiscal Accountability authors a report on the Cost of Government which looks at the total imposition of government on the economy, and calculates what the total spending and regulatory burden is on taxpayers at the local, state and federal levels. MyGovCost.Com does calculate the gap between taxes paid and federal spending, illustrating that taxes can only finance a part of the ballooning size of government. The calculator certainly paints a bleak picture – unfortunately, it only gets worse: as shown in the Cost of Government Day report, government ate up far more than the tax burden imposed on Americans in 2010; it required 63 percent of national income to sustain itself. COGD fell on August 19 in 2010 and some states, such as Connecticut, have to work as late as September 17 to pay off their cost of government. The Independence Institute’s new site is an awesome tool for taxpayers to understand the tax burden as a consequence of government spending. Be sure to check out the COGD report after calculating your cost of government to get the full picture on the extraordinary burden of government!

Tags: FederalSpending Federal | Comments (0)