The Distribution of Federal Spending and Taxes in 2006

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Presentation by Molly Dahl and Kevin Perese, CBO Analysts, at the Urban Institute

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The Distribution of Federal Spending and Taxes in 2006

  1. 1. Congressional Budget Office December 3, 2013 The Distribution of Federal Spending and Taxes in 2006 Molly Dahl, Microeconomic Studies Division Kevin Perese, Tax Analysis Division
  2. 2. Overview Extends prior CBO distributional analyses by including spending Snapshot of a single year: calendar year 2006 Not a lifetime analysis Household types Elderly Nonelderly with children Nonelderly without children Income groups among the nonelderly Market income quintiles CONGRESSIONAL BUDGET OFFICE
  3. 3. Federal Spending and Revenues, 2006 Federal Spending Federal Revenues $2.7 Trillion $2.4 Trillion CONGRESSIONAL BUDGET OFFICE
  4. 4. Allocated Federal Spending and Revenues, 2006 Analyzed the distribution of most federal spending (88 percent), and virtually all federal taxes (98 percent) in calendar year 2006 Federal Spending Federal Revenues $2.3 Trillion $2.4 Trillion CONGRESSIONAL BUDGET OFFICE
  5. 5. Categories of Federal Spending, 2006 Cash and Near-Cash Transfers Social Security Cash Transfers Social Security Refundable Tax Credits SSI UI TANF Means-Tested Veterans’ Benefits Black Lung Disability $785 Billion Near-cash Transfers SNAP Housing Assistance Pell Grants Child Nutrition Programs WIC LIHEAP CONGRESSIONAL BUDGET OFFICE
  6. 6. Categories of Federal Spending, 2006 Cash and Near-Cash Transfers Health Care Transfers $785 Billion Social Security Medicare $481 Billion Medicare Medicaid and CHIP Means-Tested Veterans’ Health Benefits CONGRESSIONAL BUDGET OFFICE
  7. 7. Categories of Federal Spending, 2006 Cash and Near-Cash Transfers Health Care Transfers Other Goods and Services $785 Billion Social Security Medicare $481 Billion $1,080 Billion National Defense National Defense Other HHS Education OPM Transportation Other Veterans Affairs Agriculture Justice Energy Other CONGRESSIONAL BUDGET OFFICE
  8. 8. Categories of Federal Spending, 2006 Cash and Near-Cash Transfers Health Care Transfers Other Goods and Services Unallocated Spending $785 Billion Social Security $481 Billion Medicare $1,080 Billion National Defense Interest On Debt $312 Billion Total Spending: $2.7 Trillion Interest on Debt CONGRESSIONAL BUDGET OFFICE
  9. 9. Spending on Cash and Near-Cash Transfers, by Type of Household, 2006 (Billions of dollars) 500 400 Other 300 Social Security 200 100 0 Elderly Nonelderly With Children CONGRESSIONAL BUDGET OFFICE Nonelderly Without Children
  10. 10. Spending on Health Care Transfers, by Type of Household, 2006 (Billions of dollars) 500 400 300 200 Medicaid and Other Medicare 100 0 Elderly Nonelderly With Children CONGRESSIONAL BUDGET OFFICE Nonelderly Without Children
  11. 11. Federal Taxes, by Type of Household, 2006 (Billions of dollars) 1,200 800 400 0 Elderly Nonelderly With Children CONGRESSIONAL BUDGET OFFICE Nonelderly Without Children
  12. 12. Average Transfers, Taxes, and Transfers Minus Taxes, by Type of Household, 2006 (Dollars per household) 30,000 20,000 Taxes 10,000 0 Transfers Transfers minus Taxes -10,000 -20,000 Elderly Nonelderly with Children CONGRESSIONAL BUDGET OFFICE Nonelderly without Children
  13. 13. Federal Spending, 2006 Cash and Near-Cash Transfers $785 Billion Health Care Transfers $481 Billion Other Goods and Services Unallocated Spending $1,080 Billion $312 Billion CONGRESSIONAL BUDGET OFFICE Total Spending: $2.7 Trillion
  14. 14. Federal Spending on Other Goods and Services, by Type of Household, 2006 (Billions of dollars) 600 400 200 0 Allocated Allocated by by Share Share of of Population Market Income Elderly Nonelderly with Children CONGRESSIONAL BUDGET OFFICE Nonelderly without Children
  15. 15. Average Spending Minus Taxes, by Type of Household, 2006 (Dollars per household) 30,000 20,000 Transfers plus Other G&S (by Share of Population) minus Taxes Transfers plus Other G&S (by Share of Market Income) minus Taxes 10,000 0 Transfers minus Taxes -10,000 -20,000 Elderly Nonelderly with Children CONGRESSIONAL BUDGET OFFICE Nonelderly without Children
  16. 16. Spending and Revenues Allocated to Nonelderly Households Federal Spending Federal Revenues $1.5 Trillion $2.7 Trillion $2 Trillion CONGRESSIONAL BUDGET OFFICE $2.4 Trillion
  17. 17. Spending on Nonelderly Households $1.5 Trillion Cash and Near-Cash Health Care Other Goods and Services $375 Billion $175 Billion $920 Billion CONGRESSIONAL BUDGET OFFICE
  18. 18. Spending on Cash and Near-Cash Transfers for Nonelderly Households Cash and Near-Cash Transfers By Income Group $375 Billion Lowest Quintile CONGRESSIONAL BUDGET OFFICE
  19. 19. Spending on Cash and Near-Cash Transfers for Nonelderly Households, by Income Group and Transfer (Billions of dollars) 200 NearCash Transfers 100 Other Cash Transfers Social Security 0 Lowest Quintile Middle Quintile CONGRESSIONAL BUDGET OFFICE Highest Quintile
  20. 20. Spending on Health Care Transfers for Nonelderly Households Health Care Transfers By Income Group $175 Billion Lowest Quintile CONGRESSIONAL BUDGET OFFICE
  21. 21. Spending on Health Care Transfers for Nonelderly Households, by Income Group and Transfer (Billions of dollars) 100 Medicaid and Other Medicare 0 Lowest Quintile Middle Quintile CONGRESSIONAL BUDGET OFFICE Highest Quintile
  22. 22. Spending on Transfers for Nonelderly Households, by Income Group (Billions of dollars) 300 200 100 0 Lowest Quintile Middle Quintile CONGRESSIONAL BUDGET OFFICE Highest Quintile
  23. 23. Taxes Paid by Nonelderly Households $2 Trillion Highest Quintile CONGRESSIONAL BUDGET OFFICE
  24. 24. Average Market Income Plus Transfers Minus Taxes for Nonelderly Households (Dollars per household) 300,000 DOWN 27% 250,000 200,000 150,000 100,000 DOWN 14% 50,000 0 UP 101% Lowest Quintile Middle Quintile CONGRESSIONAL BUDGET OFFICE Highest Quintile
  25. 25. Federal Spending on Other Goods and Services for Nonelderly Households Other Goods and Services Allocated by Share of Population $920 Billion Lowest Quintile Allocated by Share of Market Income CONGRESSIONAL BUDGET OFFICE
  26. 26. Average Spending Minus Taxes for Nonelderly Households (Dollars per household) 25,000 0 Transfers plus Other G&S (by Share of Market Income) minus Taxes -25,000 Transfers plus Other G&S (by Share of Population) minus Taxes -50,000 Transfers minus Taxes -75,000 Lowest Quintile Middle Quintile CONGRESSIONAL BUDGET OFFICE Highest Quintile
  27. 27. Recap Extends prior CBO distributional analyses by including spending More spending on elderly households than taxes paid by those households in 2006; the opposite was true for nonelderly households Among the nonelderly, more spending on lower income households than taxes paid by those households in 2006; the opposite was true for higher income households CONGRESSIONAL BUDGET OFFICE

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