Are you wondering why your taxes are being raised and the impacts it is leaving behind?
Over the past decade, the United States has witnessed a relentless surge in the inflation of taxes, a phenomenon that has sparked widespread concern and debate. Using House of Representatives disbursement data, it was interesting to see how the House of Representatives contributes to this inflation. As a governing body, the House of Representatives is responsible for the creation and passage of legislation that affects the nation’s citizens, economy, and overall welfare.
In order to do its job effectively, the House of Representatives requires a large amount of funding. Unfortunately, spending has increased quite a bit in the past 5 years. In this writing, we will look at what the United States House of Representatives spends its money on and look to find specific trends in spending over time. The United States House of Representatives operates on an annual budget, which is approved by Congress. The House’s operating expenses are categorized into several categories that include things such as personal compensation, personal benefits, equipment, and travel. The data analyzed in this report was obtained from the House of Representatives’ Statement of Disbursements. I also analyzed data from the US Census API that observes median family income by family size, as well as employment status for the population 16 years and over from the years 2011–2022. By looking at changes in median household income adjusted for inflation, I was able to highlight how the tax burden has evolved relative to people’s earning capacity.
Here is a visualization showing the total amount of money spent on each category of each year from 2011–2022:
Yearly Trends
Using the chart above for context, the US House of Representatives spent a consistent amount of money from 2013–2018, spending around $1.2 billion dollars per year. Starting in 2019, there was an increase of $108 million in the amount of funds being spent with the total being around $1.3 billion dollars. Following 2019, 2020 saw an even bigger increase of $114.5 million in the amount of funds being spent, with the total being around $1.4 billion. Finally, there was a huge spike in 2022 with the amount of funds being spent, with an increase of $263.5 million, bringing the total amount spent to around $1.68 billion. Given this data, there was an increase of about $476 million spent by the US House of Representatives from 2018–2022.
What is the main category driving this increase of spending?
After looking at the chart above, I was interested to see which category was the main cause of the continuous increase of funds being spent, and I found that personal compensation was the main driver of this increase. That is not to say there wasn’t an increase in other categories, but from 2013–2018, personal compensation was pretty consistent with the amount allocated being around $6.7 million. However, personal compensation saw an increase of $63.5 million between 2018 and 2019, bringing the total amount allocated from $676.9 million to $740 million. Three years later, 2022 saw a big spike in the amount of personal compensation funds being allocated, with an increase of $191 million, bringing the total amount allocated to $931.5 million. Given that, there was about a $254.5 million increase in funds allocated to personal compensation from 2018–2022.
Why has there been an increase in personal compensation?
After seeing this increase of funds allocated to personal compensation, I was interested to see whether or not the number of payees contributed to this increase, and surely enough there was an increase in payees within the US House of Representatives. From 2018–2019, there was an increase of 12,750 payees with the total number of payees going from 29,511 to 42,261. In 2022, there was another spike with an increase of 5,769 payees from 2021, bringing the total number of payees from 43,763 to 49,532.
This increase in the number of payees in the US House of Representatives over the past five years can be attributed to several factors, however, I think the main reason is an increased workload for the United States Congress. One significant driver has been the escalating complexity of policy issues facing the United States, spanning areas such as healthcare reform, climate change mitigation, economic stability, and national security challenges. Rapid advancements in technology and the digital landscape have introduced new dimensions to legislative responsibilities, making efforts in cybersecurity, data privacy, and digital governance necessary. A large contribution to this increased workload would also be the COVID-19 pandemic that has had the world on edge ever since it emerged in 2019. It necessitated urgent legislative responses such as relief packages, oversight of pandemic funds, and policy adjustments for public health and economic recovery. Congressional offices faced a surge in constituent inquiries and assistance requests related to COVID-19, requiring additional resources and support. Adapting to remote work and virtual legislative sessions also posed technical challenges, while ongoing efforts to address economic recovery, healthcare needs, and societal impacts further added to the workload pressures faced by the House during this period.
How does paying more taxes have an impact on median family income over time?
The impact that paying more taxes has on median family income can be significant, shaping the economic landscape and household financial stability. As taxes rise, the power of a family’s income diminishes, which can strain budgets, leading to decreased standards of living and financial insecurity for many families. This circumstance is particularly evident when it comes to median-income families, who often rely on regular paychecks to cover essential expenses such as housing, healthcare, education, and groceries. Inflationary pressures can squeeze household budgets, reducing the disposable income available for saving or discretionary spending.
Using the chart above as context, it can be seen that median family income for larger families families with four people or more was steadily dropping over time from about $600k to about $500k, until 2017, in which there was a large spike in the median family income. The median family income rose from roughly $500k to about $980k in just two years. In 2019, the median family income plummeted due to the COVID-19 pandemic, which caused an economic collapse, resulting in widespread job losses, business closures, and income disruptions. Families already facing financial jeopardy were especially vulnerable to the economic shocks caused by the pandemic, struggling to make ends meet as job opportunities dwindled and support networks strained under the weight of increased demand. One of the most immediate and noticeable effects of the pandemic on median family income was the surge in unemployment rates. Lockdown measures and restrictions aimed at curbing the spread of the virus led to mass layoffs across various sectors, particularly in industries such as hospitality, retail, and entertainment. Many individuals suddenly found themselves out of work or experiencing reduced hours and incomes, placing significant strain on household finances.
Using the chart above as context, we will be looking at the employment status among the population of 16 years and over in Boulder as an example, which was constant from 2011 to 2018, staying at roughly 180k people employed. From 2018 to 2019, there was a large decrease in the number of people employed, as it went from roughly 180k to just over 50k in one year. Following 2019, the employment status has gotten closer and closer to the 50k mark as there has not been much change, which is interesting given that the House of Representatives have increased the number of payees in their office by almost 10k in the past two years.
As taxes rise to accommodate escalating governmental expenditures, median family incomes face increasing pressures, leading to potential strains on household budgets and financial stability. The economic fallout from events such as the COVID-19 pandemic serves as a stark reminder of the vulnerability of median-income families to sudden economic shocks, highlighting the intricate interplay between legislative decisions, economic policies, and household livelihoods. That being said, the correlation between employment status and legislative spending patterns offers a different perspective on the relationship of economic vulnerability within communities. While the House of Representatives has expanded its workforce, the decline in employment rates in certain regions shows the need for strategies that address both legislative priorities and economic disparities at the grassroots level. Moving forward, it is important for policymakers to adopt an approach that balances the roles of governance with the importance of economic equity and sustainability. This means fostering transparency and accountability in decision-making, prioritizing investments that stimulate inclusive economic growth, and implementing targeted measures to support median-income families grappling with financial insecurity.
It will be interesting to see if the inflation and unemployment crisis are temporary and whether or not we will be paying less taxes and seeing more jobs for people in the future.
