How much does each American taxpayer actually contribute to Europe's military spending each year?
--- Much more than you think
Let's start with the rules. Under the formal system of the North Atlantic Treaty Organization, member states do not "buy security" from the United States. Each country only needs to bear its own military expenses and contribute a very small amount to the NATO common budget based on its national income. The so-called "2% of GDP for military spending" is not a payment to the United States, but merely a minimum political commitment to ensure that each country can at least support its own military.
Even this small amount has long been unmet by European countries.
The United States, as a net contributor to the NATO common budget, has consistently overpaid annually.
More importantly, the truly expensive and decisive security capabilities in war—nuclear umbrellas, strategic intelligence and early warning systems, space and communication networks, global rapid deployment capabilities, and the commitment to assume the initial risks in extreme situations—are not included in the NATO budget, yet have long been provided by the United States. Conservative estimates suggest that the additional systemic costs the United States bears for European security each year are between $100 billion and $200 billion. Taking a median, it's approximately $150 billion per year.
Who ultimately bears this $150 billion? The answer is simple: US taxpayers.
Based on approximately 160 million US taxpayers who actually pay federal income tax, this means that each US taxpayer is essentially paying about $1,000 more annually for Europe's military costs.
However, European countries are not receiving equivalent compensation from the US. Even including the base maintenance costs shared by host countries and arms contracts for US-made weapons, the total cost is far less than the proportion each country should bear.
If we treat security as a tradable, scarce commodity and reprice it using market logic, the conclusion becomes even more surprising: to obtain an equivalent nuclear deterrence, intelligence system, and global projection capability, the annualized cost for Europe to build its own system would be at least $200-300 billion; considering risk premiums, the reasonable cost would be even higher, potentially approaching $400 billion.
In other words, Europe has long consumed an extremely expensive security product at a very low, even near-zero, explicit price, and this cost has been averaged down to every American taxpayer.
Of course, the US's annual spending on NATO isn't without its benefits. Through a robust alliance system, the US gains lower financing costs for its debt, a capital absorption effect on the US stock market, and seigniorage from the dollar, roughly amounting to $200-250 billion annually.
So, you might ask, on paper, the US actually makes a profit, right?
Yes, but the calculation isn't that simple.
Because, based on supply and demand, and from a market game perspective, the US clearly has stronger bargaining power: its security supply is irreplaceable (only the US exists), its withdrawal or downgrading of threats is credible, while its allies face extremely high time and costs in building their own systems.
Therefore, a more reasonable strategy is not to "balance the books," but rather to extract limited security rent, charging allies tens of billions more: enough to alleviate domestic political pressure, but without charging too much to break their path dependence on the existing system and prompt other NATO countries to consider building their own.
For each American taxpayer, this equates to paying a few hundred dollars less in taxes annually.
So, if you were an American taxpayer, after calculating this, would you support Trump targeting allies?
