If you were to start a new country, one of the things you will have to consider is how the incoming tax dollars will be spent.  A government should look at its Constitution and determine the areas that are clearly reserved for the Federal Government and then the leaders should determine what percentage of tax revenues should be allocated to each area.

Let’s assume that this country is like the United States and has a Constitution like the good ole USA.  The Preamble to the US Constitution would be our general guide as to what the government should provide and it is quoted below:

We the People of the United States, in order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defense, promote the general Welfare and secure the Blessings of Liberty to ourselves and our Posterity, do ordain and establish this Constitution for the United States of America. 

That is pretty general but when we look at the current spending of the US government we have 9 major categories that cover the mandate of our Constitution and its subsequent amendments and Congressional Acts:

1.        Pensions – This is Social Security and is provided to our elderly to help them in their retirement.
2.        Health Care – This is comprised mainly of Medicare and Medicaid which helps those who are over the age of 65 or in lower income groups.
3.        Education – This provides student loans and helps with local education but the bulk of educational spending comes from State and Local governments.
4.        Defense – This provides for the “common defense” and represents our Military.
5.        Welfare – This includes aid to families who are in lower income groups as well as Unemployment Insurance for those out of work.
6.        Protection – This is comprised of Courts, Prisons and Federal Police.
7.        Transportation – This provides for infrastructure projects to provide for its citizens while they travel on ground, air and over water.
8.        General Government – This provides for the salaries of our government employees, lawmakers, etc.
9.        Other Spending – This captures all the other miscellaneous expenditures – Research, Agriculture, Forestry, Fishing, Hunting, Fuel, Energy, Pollution, Housing, etc.

Because our Government has chosen to live outside of its means, there is a 10^th area called Interest which represents our interest payments to other countries on debt that we have borrowed.  From the following link, we can see that in 2011 the US is predicted to take in $2.3 trillion in tax revenue and I calculated what each of the 10 areas represents of that total revenue (in 2011).  Here is how those 10 areas are currently appropriated as a percentage of Tax revenue:

In case you haven’t figured it out, you come to a startling revelation when you total the amounts for Pension, Health Care and Welfare – They comprise 93.7% of total Tax revenue!  Almost every dollar that the US government takes in gets transferred to people who don’t pay any Federal taxes (those receiving this aid are either poor, unemployed or retired and therefore pay no Federal Income tax).  Let that sink in for a while. Almost every dollar that the US government takes in gets transferred to people who don’t pay taxes.

From the latest IRS income tax revenue data, we can see that 51.8% of the total filers pay 98.2% of all the Federal Income Tax.  This means roughly half of Americans work to pay benefits for the other 50%.  Is that how we’d set up a country if we were to start over?

In order to live up to our Constitution and “promote the general welfare”, we must take care of those who can’t take care of themselves but are we saying that we expect half of the American population can’t take care of themselves?  Is this really how you’d set up a country if we had to do it all over again?

This is no way to run a country and is exactly why many Euro-Socialist countries are failing and in some respects this is why the Roman Empire Fell.