Where has all the money gone?: Locking up our tax revenue


Does it ever seem strange to you that the United States, one of the richest countries in the world, always seems to be short of cash? After all, according to the World Bank, the U.S. has the third-highest per capita income in the world. While our taxes aren't as high as those of many countries in the world, most of us still pay a pretty healthy chunk to our state, federal, and local governments. Given this impressive revenue stream, it's surprising that our infrastructure always seems to be in need of work, our public universities are consistently underfunded, and our state social services are often swamped. Where does the money go?

Well, a big part of it pays the room and board for some of our least productive citizens. According to a recent study by the Pew Research Center, at the beginning of 2008, 2,319,258 people, more than 1% of all American adults, were in prison. Even if we were to feed all these prisoners ramen noodles and have them room together, slumber-party style, paying to take care of this many people would be a back-breaking expense. As it is, our corrections system cost more than $49 billion in 2007. For the average state, corrections spending ate up more than 7% of tax revenues; in some states, such as Michigan and Vermont, spending on prisons was actually higher than spending on colleges and universities.