Where does your tax money actually go?

Governments categorize spending using a system called COFOG — Classification of Functions of Government. It breaks public expenditure into 10 main categories: social protection, health, education, general public services, defense, economic affairs, housing, recreation, environmental protection, and public order.

The distribution across those categories differs dramatically between countries — and those differences reflect deep choices about the role of the state. Here is where France, the United States and the United Kingdom spend their public money, as a share of total government expenditure (OECD National Accounts, 2023).

For every €100 in taxes collected

The single biggest line item in every country is social protection — pensions, unemployment benefits, disability, and family allowances. In France it accounts for 44 cents of every euro collected in taxes. In the US, despite its reputation as a smaller-government country, social spending still absorbs over a third of federal expenditure.

Why France spends so much on social protection

France's 44% allocation to social protection reflects three structural realities. First, an aging population: retirement pensions alone account for roughly 14% of GDP — among the highest in the OECD. The pay-as-you-go system means today's workers fund current retirees, and the ratio of workers to retirees has been declining for decades.

Second, generous unemployment insurance: the French système d'assurance chômage provides up to 75% of prior net salary for up to 24 months, far exceeding the OECD average. This is funded directly through social contributions — which is why French payroll taxes are so high.

Third, universal family support: France pays child allowances starting from the second child, subsidizes childcare heavily, and provides a range of housing benefits. These are popular policies with strong cross-party support, which makes them structurally sticky.

The hidden spending: debt interest

Debt interest is the most politically invisible line in every government budget — because it doesn't deliver visible services. The US federal government now spends 8 cents of every tax dollar on interest, more than it spends on education. That ratio has been rising for a decade and shows no sign of reversing.

France's situation is less acute but deteriorating. French public debt exceeded 110% of GDP in 2024, and interest payments at 4% of spending reflect the current low-to-moderate rate environment. If rates remain elevated, that figure will rise — squeezing the space for other expenditure without raising taxes further.

Healthcare: the US exception

The US stands out on healthcare spending: 26% of public expenditure vs. 15% in France and 20% in the UK. This is despite the US having a smaller public health system (Medicare + Medicaid cover roughly 40% of the population). The explanation is unit cost — US healthcare is simply much more expensive per procedure, driven by administrative complexity, drug pricing, and provider consolidation.

The result is that the US spends more public money on healthcare per capita than most universal-coverage countries — while leaving a large portion of its population uninsured or underinsured. France and the UK achieve broader coverage at lower public cost per capita, partly through price controls and centralized negotiation.

What this means for you personally

If you earn €60,000 in France and pay roughly €27,600 in total taxes (at a 46% effective rate), your contribution breaks down approximately as:

Over a 40-year working life at similar income, a French worker contributes approximately €1.1 million to the public purse in taxes and contributions — nearly half of which funds the retirement pensions of others, including, eventually, their own.