2 Answers | Add Yours
By far the largest source of revenue for the United States federal government (as opposed to state and local governments) is income tax and payroll taxes from private individuals.
Between them, these two kinds of taxes (payroll taxes are taken our for things like Social Security and Medicare -- they are taken straight out of your paycheck without you asking for it to happen) make up eighty percent of the government's revenues.
The next biggest source of revenue is corporate income taxes (those paid by businesses and not by individuals). This makes up about 12% of the total.
The federal government's largest source of revenue is from income/earnings taxes. This revenue comes from private, personal income taxes; it comes from corporate earnings taxes; and it comes from payroll deduction taxes.
The ratio of these three classes of income/earnings taxes has changed in recent years. In the 1950s corporations paid between 5 and 6 % in corporate income taxes, by 2010, while corporate wealth had escalated, the amount paid in taxes had dropped to 1.3%. During the same period, revenue from personal income tax has been fixed at around 8%; personal income was and continues to provide the largest share of federal revenue.
Payroll deduction taxes provide the third largest share of federal revenue. Payroll taxes include unemployment insurance, Social Security and Medicare. Special categories of deductions are railroad retirement and federal workers’ pension contributions.
In 2010, individual income taxes made up 47% of federal revenue. Payroll taxes made up 40% of federal revenue. Corporate income taxes made up a shameful 9% of federal revenue. As corporate income has increased since 1990, the percent of corporate taxation has fallen through 2013. This means that personal income has contributed a comparably greater amount to federal revenue over the same time period.
We’ve answered 319,175 questions. We can answer yours, too.Ask a question