- Days left

Your cumulative bill for the Iraq war: \$1,020

×
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

Intro to Retirement

Get started early planning for your long term future.

Building Credit from Scratch

Start building credit...now.

TurboTax Articles

What is IRS Form 8379: Injured Spouse Allocation

The Internal Revenue Service (IRS) has the power to seize income tax refunds when a taxpayer owes certain debts, such as unpaid taxes or overdue child support. Sometimes, a married couple's joint tax refund will be seized because of a debt for which only one spouse is responsible. When that happens, the other spouse is said to be "injured" and can file Form 8379 to get at least some of the refund.

What are 1095 Tax Forms for Health Care?

The Affordable Health Care Act, also known as Obamacare, introduced three new tax forms relevant to individuals, employers and health insurance providers. They are forms 1095-A, 1095-B and 1095-C. These forms help determine if you need to comply with the new shared responsibility payment, the fee you might have to pay if you don't have health insurance. For individuals who bought insurance through the health care marketplace, this information will help to determine whether you are able to receive an additional premium tax credit or have to pay some back.

A Tax Guide for Solopreneurs: Self-Employed Tax Tips

Flying solo can be the ultimate business adventure. When you run your own business and you're the only employee, you truly hold all the cards and earn the freedom to achieve your ideal work-life balance. Working for yourself also brings tax advantages not available to those who work for others. It's important to understand the tax rules that apply to the self-employed to profit the most from these.

Rules for Claiming a Dependent on Your Tax Return

Rules on dependents can help you save thousands of dollars on your taxes. Yet many of us are not aware of who in our family may qualify as our dependent. Review the rules for claiming dependents here.

7 Requirements for the Child Tax Credit

The Child Tax Credit can reduce your tax bill by as much as \$1,000 per child, if you meet all seven requirements.