Where Does Welfare Money Come From?

Welfare money is taken from government revenue, which in turn comes from numerous sources, such as income taxes, social insurance taxes, ad valorem taxes, fees and charges. For 2015, the United States has allotted 8 percent of its total spending budget for welfare.

Welfare programs are in place to reduce poverty. In the United States, such programs include food stamps, Social Security, unemployment benefits and earned income tax credits. Despite being an advanced nation, the U.S. poverty rate in 2013 was 14.5 percent, meaning 45.3 million Americans lived in poverty. As an example of how welfare programs alleviate poverty, according to a study by the Pew Charitable Trusts, without food stamps, the poverty rate would increase to 17.10 percent, which translates to an additional 8 million Americans who would be living in poverty.