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Which Government Agency Takes the Most from Taxpayers Wallets: The IRS Explained
Which Government Agency Takes the Most from Taxpayers' Wallets: The IRS Explained
The United States government, often perceived as a consumer of tax revenue, actually functions as a creator and administrator of money. This fundamental principle can often lead to confusion regarding where tax money goes. In this article, we will explore who collects the most money from taxpayers, with a specific focus on the Internal Revenue Service (IRS).
Understanding the Federal Government's Role in Creating Money
Federal government taxes do not directly fund anything, which might seem surprising to many. The reality is that taxes follow the creation of money and are applied to personal and corporate incomes rather than the other way around. This process is an essential part of the larger economic system. The federal government is the creator of the money supply, leaving state and local governments to rely on tax receipts to fund their expenditures.
The IRS: Collected the Most Taxes Year After Year
The Internal Revenue Service (IRS) is the primary government agency responsible for collecting the vast majority of taxpayer money. In the last fiscal year, the IRS collected over $3.7 trillion in taxes, which represents almost all of the money paid to the government. This centralized collection system ensures a consistent flow of revenue that drives the country's fiscal health.
Expenditure Breakdown
When considering discretionary spending, the military and defense sector claims the lion's share, amounting to approximately $525 billion. This is more than double the $250 billion allocated to Health and Human Services. However, Social Security benefit payments, which are non-discretionary, account for a significant portion of the budget, totaling around $925 billion.
How Does the IRS Operate?
Collecting taxes is essentially the primary function of the IRS. Their job is to monitor, calculate, and collect taxes from individuals and businesses through a complex system of audits, returns, and assessments. Despite this central role, the IRS is not involved in the direct spending of funds. Instead, they function as intermediaries, ensuring that the tax system operates efficiently and accurately.
Conclusion
In summary, the Internal Revenue Service (IRS) is the government agency that collects the most money from taxpayers. Their primary function is to ensure that the tax system is secure and effective, a crucial role in maintaining the financial health of the country.