Posts Tagged ‘government’

Where does YOUR Money Go?

April 12, 2011

Tax season is in full swing and the deadline for submitting your portion is fast approaching.  This year the deadline for filing your federal taxes has been extended by three days to April 18.  (In case you were wondering why, it is in observance of Emancipation Day in the District of Columbia.)  Your state taxes however, may still due by April 15.  Check with your state government office for your exact deadline.

The history of taxes and taxation take us back to our colonial days and part of the reason for our succession from Great Britain.  The beginning purposes of federal taxes in the United States though were to fund our war effort in the American Civil War.  Today besides funding war efforts, taxes pay for a wide variety of expenses and programs.  Not surprising though, most of us really don’t know where our tax dollars go within the federal budget.

We thought you might be curious.  Take a peek:

Social Security 20.4%
Defense 20.2%
Medicare 13.1%
Low-income Assistance 9.3%
Medicaid 7.9%
Net interest Payments 6.6%
Unemployment Compensation 4.7%
Veterans Affairs 3.1%
Education 2.9%
Law Enforcement & Homeland Security 2.4%
Transportation 2.3%
Health (not Medicare or Medicaid) 2.0%
Management of Federal Employees & Buildings 1.4%
Environmental Protection & Natural Resources 1.0%
Space & Science 0.7%
Agriculture 0.7%
Housing & Community Planning 0.6%
Social Services 0.6%
Foreign Aid 0.6%
Workplace Safety & Rights 0.5%
Diplomacy & Embassies 0.4%
Internal Revenue Service (IRS) 0.4%
Energy 0.4%
Statistics & Weather 0.3%
Telecommunications 0.3%
Trade & Economic Development 0.3%
Native Americans 0.2%
Congress 0.2%
Post Office 0.1%
Arts & Culture 0.1%
District of Columbia <0.1%
White House <0.1%
Bailouts, Currency & Financial Regulation -3.7%

If you would like to know how this specifically applies to you.  Visit: thirdway.org/taxreceipt.  You can enter the amount of your federal taxes paid in 2010 to see exactly how much went to each category.  You can also review each category for a sub-list of what is included in each one and how those areas are divided.

Incidentally, as of January of this year our national debt was $14,025,215,218,709 of which every American has a share of $48,382.  Unfortunately, that amount is $5,768 more than it was in 2009.

If this information concerns you, get involved!  You can easily find out who your elected officials are and how to contact them by visiting: congress.org and simply entering your zip code under the “Get Involved” section.

Too Much of a Good Thing?

March 18, 2010

Last month we posted an article on RD (Rural Development) home loans.  We outlined the basics and how this is a great option to consider when purchasing a home, especially when so many areas and buyers may qualify.  Unfortunately, this program may come to a sudden halt – at least for the rest of this fiscal year.

Early last week a memo from the US Department of Agriculture Rural Development alerted lenders that they anticipated funding for this year’s program to be exhausted by the end of April, 2010.  This news itself is nothing earth shattering, but the timing most certainly is.  Normally funds start to become depleted in the fall near the end of USDA’s fiscal year which ends September 30th. 

The other challenge is that there will not be any Conditional Commitments.  Typically as funds are depleted, loans are conditionally approved pending more fund allocation.  Once the department has the new fiscal year’s budget approved with new government funding those loans are fully approved and business continues as usual.  Not this year.  Since there is such a huge gap between now and the start of the next fiscal year, Conditional Commitments are just not appropriate.

So what caused this problem?  Why did the funding end so quickly?  The easiest explanation is the growing popularity of the program.  Kevin Smith, Area Director for Rural Development says, “Record demand, not only in Michigan but nationally, for the Guaranteed Rural Housing loan program will led to the full utilization of Congressionally appropriated funding at an early time frame this fiscal year.”

We too have seen a steady increase in RD loans; and our company continues to underwrite more RD loans than any other lender in the state of Michigan.  As more borrowers learn about the program with low income requirements, 100% financing options, and the vast amount of area classified as rural; demand will continue to increase. 

The next obvious question is what can be done to ease this challenge in the future?  Should more money be allocated to the program?  Should the upfront funding fee be increased like the FHA program has done?  Should this be a top subject for Congress to focus on?  Smith could not comment on policy issues of the federal government, but one thing is sure.  If you want to take advantage of this program yet this fiscal year, you need to have a signed purchase agreement as soon as possible.  There are only 6 weeks left before committed funds are anticipated to be exhausted.  Miss this window, and you may need to wait until October to get in on this program again.

Things could always change based on how the federal government reacts.  Time will tell.  In the meantime, we’ll keep watching and will let you know how this program progresses.