- 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

Understanding Credit Scores

Credit scores matter -- learn how to improve your score.

View Course »

Intro to different retirement accounts

What does it mean to have a 401(k)? IRA?

View Course »

TurboTax Articles

8 Things You Think Are Tax Deductible That Aren't

There?s a fine line between looking to save money on your taxes and taking deductions that will raise eyebrows at the Internal Revenue Service. Some taxpayers are tripped up by expenses that they assume are tax deductions, but don?t qualify under IRS guidelines. Here are a dozen items that can lead to unpleasant surprises in case of an audit.

9 Things You Didn't Know Were Tax Deductions

Few realizations are more painful than realizing that you forgot to include a tax deduction that would have lowered your tax bill or increased your tax refund on your tax return. Here are some tax deductions that you shouldn't overlook.

A Comparative Look at State Taxes

Ever wondered which state has the highest gas tax or the lowest overall tax burden? Interact with the infographic below to compare income tax, property tax, and other taxes by state.

Add a Comment

*0 / 3000 Character Maximum