Lecture on Federal Income Tax and Spending

Introduction

• Sponsored by Audible for PBS Digital Studios.
• Reflects on the surprise of federal income tax from the first paycheck.

Federal Income Tax Overview

• Federal Insurance Program:
  • Supports elderly, retirement, and medical programs.
• Historical Tax Rates:
  • Pre-1913: Income tax forbidden by U.S. Constitution.
  • 16th Amendment allowed income tax.
  • 1981: Top tax rate at 70% for high earners.
  • 1945: Highest recorded rate at 94% for the ultra-wealthy.
• Current Context:
  • Tax rates lower but still significant.
  • Importance of understanding government spending.

Case Study: Tabitha's Tax Contribution

• Profile:
  • Works in HR, earning $40,000 in 2017.
  • Taxable income: $29,600, in the 15% bracket.
• Federal Tax Payment:
  • Total Federal Taxes: $7,038.
  • Breakdown:
    • Social Security and Medicare:
      • Nearly half of taxes.
      • Supports disabled and retired individuals including her grandparents.
    • Medical Programs:
      • Medicaid, CHIP account for almost 60% of taxes with FICA included.
    • Military:
      • $930 supports armed forces and military infrastructure.
    • National Debt:
      • $525 covers loan repayments and interest.
    • Other Allocations:
      • Unemployment and labor programs: $298.
      • Veterans benefits: $238.
      • Food and agriculture: $179.
      • Government operations: $167.
      • Transportation: $127.
      • Education: $111.
      • Housing and community: $83.
      • Energy and environment: $63.
      • International affairs: $51.
      • Science programs: $39.

Conclusion

• Federal income tax funds programs that affect daily life.
• Tax spending is not fixed and public input can influence allocations.
• Advocacy through local representatives and education is important.

Audible Sponsorship

• Promotion of Audible’s selection, including Audible Originals.
• Highlighted audiobook "Ponzi Supernova."
• Information on membership benefits and access is provided.