Nearly Half of All Americans Don t Pay Income Taxes Percentage of U.S. Population Not Represented on a Taxable Return 50% 49.5% 40% 34.1% 30% 23.7% 20% 10% 12% 0% 1962 1970 1980 1990 2000 2009 Note: Figures for 1977 to 1982 were extrapolated due to unavailable data. Source: Heritage Foundation calculations based on data from the Internal Revenue Service, Individual Income Tax Returns, Publication 1304, 1962 2009, Table 1.4, and various IRS reports. Chart 1 ArticleName
More than 70 Percent of Federal Spending Goes to Dependence Programs Share of Total Federal Spending 80% 70% 2003: 68.3% 70.5% 60% 50% 1990: 48.5% 40% 1962: 28.3% 30% 20% 10% 0% 1962 1970 1980 1990 2000 2010 Sources: Office of Management and Budget, Historical Tables: Budget of the United States Government, Fiscal Year 2012, 2011, Table 1.1, pp. 22 and 23, and Heritage Foundation calculations sourced throughout the Index of Dependence on Government. Chart 2 ArticleName
Housing Assistance Breaks Record Second Year in a Row Expenditures in Billions of 2005 Dollars $60 $50 Year-to-Year Change Increase Decrease 49% increase from 1990 to 1995 42% increase from 2006 to 2010 $59.4 $52.3 $40 $30 273% increase from 1975 to 1981 $20 $10 Source: Office of Management and Budget, Historical Tables: Budget of the United States Government, Fiscal Year 2012, 2011, Table 3.2, p. 57, and Table 12.3, p. 276. Chart 3 ArticleName
Medicare and Medicaid Costs Rapidly Increasing Expenditures in Billions of 2005 Dollars $500 138% increase from 1999 to 2010 $400 Year-to-Year Change Increase Decrease MEDICARE $452 $430 $300 127% increase from 1989 to 1998 $200 $100 Expenditures in Billions of 2005 Dollars $300 Year-to-Year Change Increase Decrease MEDICAID $273 $251 $200 $100 Source: Office of Management and Budget, Historical Tables: Budget of the United States Government, Fiscal Year 2012, 2011, Table 3.2, p. 57, and Table 12.3 p. 266. Chart 4 ArticleName
Welfare and Low-Income Health Care Assistance Surges Expenditures in Billions of 2005 Dollars $1,200 $1,000 Year-to-Year Change Increase Decrease 41% increase from 2008 to 2010 $1,137 $994 89% increase from 1997 to 2007 $800 $600 87% increase from 1990 to 1996 $400 $200 Source: Office of Management and Budget, Historical Tables: Budget of the United States Government, Fiscal Year 2012, 2011, Table 3.2, p. 57, and Table 12.3, pp. 265, 266, 271, and 299. Chart 5 ArticleName
First of 78 Million Baby Boomers Retiring Expenditures in Billions of 2005 Dollars $1,200 $1,000 Year-to-Year Change Increase Decrease $1,053 $1,023 $800 0.5% decrease from 1998 to 1999 (only decrease) $600 $400 $200 Source: Office of Management and Budget, Historical Tables: Budget of the United States Government, Fiscal Year 2012, 2011, Table 3.2, p. 57. Chart 6 ArticleName
College Education: Dependence on Government Doubles Expenditures in Billions of 2005 Dollars $50 Year-to-Year Change Increase Decrease $49.3 $40 $30 $20 $10 Average, 1979 2001: $13.7 billion Average, 2002 2010: $26.2 billion $18.5 Source: Office of Management and Budget, Historical Tables: Budget of the United States Government, Fiscal Year 2012, 2011, Table 3.2, p. 57, and Table 12.3, p. 265. Chart 7 ArticleName
The Era of Big Farming Expenditures in Billions of 2005 Dollars $100 Year-to-Year Change Increase Decrease $90.1 $80 $62 $60 $40 $18 Average, 1978 1987: $49.4 billion Average, 1988 1998: $31 billion Average, 1999 2010: $51.9 billion $45.5 $20 Source: Office of Management and Budget, Historical Tables: Budget of the United States Government, Fiscal Year 2012, 2011, Table 3.2, pp. 56 and 57, and Table 12.3, pp. 265 and 270. Chart 8 ArticleName
Farm Subsidies and Farmer Income In the early 1990s, U.S. farming income was close to the national average. In the late 1990s when farming income surged above the national average the government raised farming subsidies by more than 67 percent. Average Household Income $100,000 $75,000 Farm Operators $83,000 $50,000 All U.S. $65,500 $25,000 1988 1990 1995 2000 2005 2010 Rural and Agricultural Expenditures, in Billions of 2005 Dollars $100 $75 $50 $25 Average, 1988 1998: $31 billion Average, 1999 2010: $51.9 billion 1988 1990 1995 2000 2005 2010 Sources: Office of Management and Budget, Historical Tables: Budget of the United States Government, Fiscal Year 2012, 2011, Table 3.2, pp. 56 and 57, and Table 12.3, pp. 265 and 270; U.S. Department of Agriculture, Resource Management Survey, at http://www.ers.usda.gov/briefing/wellbeing/images/ Averagefarmincomesource/Averagefarmincomesource_d.html (November 2, 2011); and U.S. Census Bureau. Chart 9 ArticleName
Dependence on Government Jumps 8.1 Percent in a Single Year Index Scores 300 250 200 24% increase from 2005 to 2010 237 294 150 100 1980: 100 (base year) 50 0 1962 1970 1980 1990 2000 2010 Source: Based on Heritage Foundation calculations sourced throughout the Index of Dependence on Government. Chart 10 ArticleName
Government Dependence Index Values and Major Policy Changes 120 100 Shaded periods denote recessions 80 Health and Welfare Housing 60 Retirement 40 Education 20 Rural and Agricultural Services 0 Major Policy Changes 1965: Great Society programs: Medicare, Medicaid, Higher Education Act, Department of Housing and Urban Development 1970: Expansion of Social Security benefits 1981: First Reagan budget and tax cuts 1987: Extension of Social Security taxes to state and local government workers 1996: Welfare reform to include work requirement and Freedom to Farm Act 1998: Expansion of Medicaid to cover low-income children 2002: Expansion of agricultural subsidies, No Child Left Behind Act 2003: Passage of Medicare prescription drug benefit 2006: Hurricanes Katrina and Rita relief; Pell Grant expansion 2008 2010: Recession-related programs Source: Based on Heritage Foundation calculations sourced throughout the Index of Dependence. Chart 11 ArticleName
1 in 5 Americans Dependent on Government Percentage of Total U.S. Population Who Receive Government Assistance 25% 20% 1994: 23.1% 21.8% Individuals in Dependence Index (not Including Government Employees), in Millions 70 60 1994: 60.8 67.3 50 15% 40 10% 11.7% 30 20 21.7 5% 10 0% 1962 1970 1980 1990 2000 2010 0 1962 1970 1980 1990 2000 2010 Source: Heritage Foundation calculations based on data from the U.S. Department of Education, Social Security Administration, U.S. Department of Health and Human Services, Office of Personnel Management, and the U.S. Census Bureau. Chart 12 ArticleName
More Income, More Dependence In 2010, individuals receiving income from government programs took in more money ($32,748) than the average American earned in disposable income ($32,446). Income Per Capita $35,000 $30,000 $25,000 Disposable Personal Income, All Americans $32,748 $32,446 $20,000 $15,000 $10,000 Amount, Americans Who Receive Government Assistance $5,000 1962 1970 1980 1990 2000 2010 Sources: U.S. Department of Commerce, Bureau of Economic Analysis, National Income and Products Account, Table 2.1, and Heritage Foundation calculations using data from the Office of Management and Budget, U.S. Department of Education, Social Security Administration, and U.S. Department of Health and Human Services. Chart 13 ArticleName
More than 91 Million Americans Are Dependent on Government Sum of Program Participants and Government Employees, in Millions Year-to-Year Percentage Change of Total Program Participants and Government Employment 100 80 91.2 million +10% +8% 1966: +8.5% 60 +6% 2010: +3.3% 2009: +4.2% 40 20 33.6 million +4% +2% 0% 1991: +3.2% 0 1962 1970 1980 1990 2000 2010 2% 1982: 1.8% Source: Heritage Foundation calculations based on data from the U.S. Department of Education, Social Security Administration, U.S. Department of Health and Human Services, Office of Personnel Management, and Office of Management and Budget. Chart 14 ArticleName
Federal Employment Growth Highest Since 1968 Year-to-Year Percentage Change in Federal and State Employment +15% +12.9% State Federal +10% +5% 1968: +3.5% 1985: +3.3% State employment increased every year from 1984 to 2008 (average annual change: +1.7%) +3.5% 0% 1.2% 1.0% 5% Federal employment declined every year from 1990 to 1999 (average annual change: 2.4%) 10% 1963 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 Sources: U.S. Department of Labor, Bureau of Labor Statistics, Current Establishment Survey, Employees on Nonfarm Payrolls by Industry Subsectors and Selected Detail, Table B-1, by Haver Analytics; and U.S. Department of Defense Active Duty Military Data, by Haver Analytics. Federal data prior to 2002 is from Office of Management and Budget, Historical Tables: Budget of the U.S. Government, Fiscal Year 2009, 2008, Table 17.5. Chart 15 ArticleName
Index of Dependence on Government, 1962 2010 Year Housing Health and Welfare Retirement Education Rural and Agricultural Services Index Value Annual Percentage Change in Index Value 1962 1 6 5 2 5 19 1963 1 6 5 2 6 21 11.72 1964 1 7 5 2 7 22 2.69 1965 2 6 6 2 6 22 0.55 1966 2 7 6 4 4 23 5.99 1967 2 8 7 7 5 28 22.18 1968 2 9 8 9 6 34 21.58 1969 2 10 9 7 7 36 4.89 1970 3 11 9 8 7 39 7.66 1971 4 14 11 7 7 43 12.14 1972 6 17 11 7 8 49 13.60 1973 9 16 13 7 8 52 4.72 1974 9 16 14 5 5 49 5.09 1975 9 21 15 7 5 57 17.15 1976 14 24 16 8 6 69 20.72 1977 20 24 18 9 9 78 13.42 1978 22 22 18 10 13 86 9.90 1979 26 22 19 12 12 91 5.04 1980* 30 25 20 15 10 100 10.45 1981 34 26 22 18 10 109 9.27 1982 34 25 23 14 10 106 3.31 1983 36 27 24 13 12 112 6.17 1984 38 24 25 13 8 108 3.55 1985 38 25 26 14 13 115 6.23 1986 38 26 27 14 14 118 3.01 1987 36 26 27 12 11 113 4.35 1988 38 27 28 13 8 114 0.24 1989 38 28 29 16 7 118 4.14 1990 39 31 30 16 7 123 3.81 1991 40 37 31 17 7 132 7.34 1992 42 45 33 16 7 143 8.21 1993 47 47 34 20 9 157 10.31 1994 51 49 36 11 8 154 1.85 1995 58 50 38 19 6 170 10.17 1996 56 50 39 16 6 167 1.91 1997 56 49 41 15 6 168 0.70 1998 57 50 41 15 6 171 1.60 1999 55 53 41 13 10 172 1.08 2000 56 55 42 12 13 179 3.76 2001 57 59 44 12 11 183 2.24 2002 62 68 46 20 10 206 12.60 2003 64 73 48 26 12 223 8.43 2004 64 75 49 28 8 224 0.39 2005 63 75 51 34 15 237 5.89 2006 62 73 52 52 21 261 9.80 2007 70 74 56 25 12 237 9.28 2008 67 81 57 23 10 239 1.12 2009 77 99 63 22 12 272 13.84 2010 87 112 65 20 10 294 8.11 * Base year Sources: Heritage Foundation calculations sourced throughout the Index of Dependence on Government. Table 1 ArticleName