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We’ve been busy behind the scenes here at the MyGovCost project at the Independent Institute, as we’ve just completed our major annual update to the MyGovCost Government Cost Calculator!
The MyGovCost Government Cost Calculator is the only tool available for you, the ordinary taxpayer, to get a sense of what the U.S. government’s expected spending and tax revenue will cost you, in terms of what you could otherwise have earned if you had been able to invest your hard-earned money instead.
So, let’s consider a simple example of that math! Let’s say that you’re 40-years old, you have earned a Bachelors degree, you’ll have an income growth trajectory to similar peers with the same educational level, and that you currently earn what we estimate the median household income for 2014 will be reported to be later this year: $53,601.
The chart below shows what the federal government’s current spending and tax collection projections and national debt accumulation will really cost you over the next 40 years:
In terms of the U.S. government’s spending, your personal share would be $615,014 from 2015 to 2056, while your personal share of federal taxes would be $398,532. These figures are in today’s U.S. dollars.
But if you had instead been able to keep your money and invest it over the long term in a well-diversified investment like an S&P 500 index fund and earn its very long-term inflation-adjusted average rate of return, you could have had an extra $1,729,792 to show for what the U.S. government’s spending will cost you!
The cool thing is that the MyGovCost Government Cost Calculator can create a personalized estimate of the impact of the U.S. government’s spending in the future for anyone, based just on their educational attainment, their current age, and their current income.
So check out the latest update to the MyGovCost Government Cost Calculator. And as a bonus feature, after checking out your own numbers, check out how they might change for a hypothetical situation, say if you were someone like Apple’s Tim Cook, television icon Oprah Winfrey, or former U.S. President Bill Clinton, or if you were someone at the opposite end of the income-earning spectrum!