- Days left
Yesterday President Bush signed bills that fund $162 billion more for the wars in Iraq and Afghanistan. That brings the total bill to about $650 billion for the Iraq war and roughly $200 billion for Afghanistan. How do you figure out what your financial share of the $850 billion war tab is?

Your share of the bill is impossible to calculate on a general basis, but let's try with some 2006 Census Bureau numbers. If you calculate by the number of individual Americans over 25 (195 million), you get a bill of $4,360. Only 152 million are in the workforce, so that makes the bill $5,592. If we go by households (112 million) it's $7,590.

Where it gets really complicated is that if you make more money, you pay more taxes -- and a higher percent of the taxes you pay go to the federal government, not social security. The Congressional Budget Office divided the population into fifths by their income. The highest fifth (or quintile) made an average $231,000 pre-tax in 2005. They paid 86% of federal income taxes. (This calculation leaves out not only Social Security, but also corporate and excise taxes.) That means the top 20% (or 28 million households) paid 86% of the $850 billion or $731 billion. So the average Iraq and Afghanistan wars bill for those in the top 20% is now $26,100. The top 1%, who make an average $1.6 million pre-tax, pay 39% of income taxes, so their cumulative bill would be $30,136.

The American family in the total middle, who average $58,500 in 2005, pays only 4.4% of income taxes. If you divide $37 billion among its 28 million quintile, you get a $1,335. I think that's probably closest to the actual tab for the typical American family. That's $314 for Afghanistan and $1,020 for Iraq.

None of this, of course, gets into the real cost of the wars, our American dead and injured, and their families. Or even the broader economic implications. My friend Anna Bernasek did a much more thoughtful and insightful economic analysis in the New York Times of what the Iraq war cost the Iraq ($24 billion a year or 40% of GDP) or would cost America (roughly $1 trillion over a decade or 1% of our income.) And I'm not going to start on the interest on all this. Since we've borrowed the money for the wars, the actual tab is going to be higher, just like if you buy an appliance on a credit card. But if you're a typical American family, you've paid roughly $1,000 for Iraq.

Increase your money and finance knowledge from home

How to Buy a Car

How to get the best deal and buy a car with confidence.

View Course »

Goal Setting

Want to succeed? Then you need goals!

View Course »

TurboTax Articles

Top 6 Tax Tips for Sharing Economy Freelancers

It's never been easier to earn a few extra dollars: Whether you drive for a ride-share company like Uber, rent out a room through a rental service such as Airbnb, or work for a company like TaskRabbit that outsources small jobs, errands and tasks?being a freelancer in the sharing economy means you may have one or more micro-enterprises or small businesses going on. And, just as your full-time job does, these endeavors often result in tax obligations people often overlook.

Claiming Property Taxes on Your Tax Return

If you pay taxes on your personal property and owned real estate, they may be deductible from your federal income tax bill. Most state and local tax authorities calculate property taxes based on the value of the homes located within their areas, and some agencies also tax personal property. If you pay either type of property tax, claiming the tax deduction is a simple matter of itemizing your personal deductions on Schedule A of Form 1040.

Side-Giggers: Tax Tips for Side Jobs

Having a side gig can help you make ends meet or build your rainy day fund. Income from freelance work, running your own small business or working at a second job brings in extra income without requiring you to quit your day job. But, like your main source of income, a second job or side gig must be reported on Form 1040 at tax time.

Tax Aspects of Home Ownership: Selling a Home

Though most home-sale profit is now tax-free, there are still steps you can take to maximize the tax benefits of selling your home. Learn how to figure your gain, factoring in your basis, home improvements and more.

Add a Comment

*0 / 3000 Character Maximum