Current U.S. Federal Government Tax Revenue

Who Really Pays Uncle Sam's Bills?

Federal government revenue
All Federal government revenue comes from you in the end. Photo by Justin Sullivan/Getty Images

The U.S. government's total revenue is estimated to be $3.632 trillion for fiscal year 2018. (Sources: "Mid-Session Review Fiscal Year 2017," Office of Management and Budget, July 15, 2016.)

Sources

Individual taxpayers like you provide most of the income for the federal government’s budget. That's because income taxes contribute $1.88 trillion, almost half of the total. Another third ($1.2 trillion) comes from your payroll taxes.

This includes $878 billion for Social Security, $268 billion for Medicare and $56 billion for unemployment insurance. Corporate taxes add $478 billion. Customs excise taxes and tariffs on imports contribute $144 billion.

The Federal Reserve, as the bank for federal government agencies, pays interest on the billions of dollars in operating funds deposited by various federal agencies. It also pays interest on the $4.4 trillion it acquired through quantitative easing. The interest totals $61 billion. The rest ($65 billion) comes from estate taxes and miscellaneous receipts. (Source: "Mid-Session Review Fiscal Year 2017, Table S-5," OMB, July 15, 2016.)

Why All the Tax Burden Really Falls on You

The Congressional Budget Office points out that, in effect, the entire U.S. tax burden really falls on individuals. That's because corporations pass on their tax burden to families in the form of higher prices or lower wages.

Corporations must maintain their profit margin to satisfy stockholders, so they pass on any additional corporate taxes to consumers or workers. Bottom line, everything the government spends ultimately comes out of your pocket, no matter what happens with the corporate tax rate. For more, see Why Do We Have to Pay Taxes?

How Does Revenue Relate to the Deficit, Debt and GDP?

The government's annual income will pay for 92 percent of spending, creating a $352 billion deficit. Shouldn't Congress only spend what it earns, just like you and me? It depends. Deficit spending can boost economic growth in a recession. But when the economy recovers, the government should live within its means and spend less. To find out why, see Types of Fiscal Policy.

Historically, the revenue collected equals 19 percent of gross domestic product. That's the nation's measurement of economic output. That's like saying the average tax rate for the United States is 19 percent. If that much production is going to the federal government, then you want to make sure it's reinvested into the economy to support future growth. Here's how it's being spent.

The Budget's Relation to Economic Growth

The Office of Management and Budget estimates revenues at 19.7 percent of GDP for FY 2018. That's higher than the historical 19 percent target. But revenues would be much higher without the extension of the Bush tax cuts and the Obama tax cuts. Those cuts should be reversed now that the recession is over. That's the time to pay off the debt.

Income taxes were cut to fight the 2001 and 2008 recessions.

The cuts were meant to spur the consumer spending that drives almost 70 percent of economic growth. Most people didn't even realize this happened, since the tax cut showed up as reduced withholding instead of a check. Instead of spending the cuts, people used some of it to pay off debt. The recession scared people into saving more and using credit cards less. So, the budget didn't expand enough to spur economic growth.

 

U.S. Tax Revenue by Year

If the OMB's estimate is correct, the $3.9 trillion collected in FY 2018 will be the highest ever received by the U.S. government. It's more than was collected in the first 180 years of our country's history. 

Here's a record of income for each fiscal year since 1960. There are links to more details about the revenue back to the FY 2006 budget. Tax receipts fell off during the recession, but started setting new records in FY 2013.

  • FY 2017 (est.) - $3.632 trillion.
  • FY 2016 - $3.276 trillion.
  • FY 2015 - $3.250 trillion.
  • FY 2014 - $3.021 trillion.
  • FY 2013 - $2.775 trillion.
  • FY 2012 - $2.45 trillion.
  • FY 2011 - $2.3 trillion.
  • FY 2010 - $2.16 trillion.
  • FY 2009 - $2.1 trillion.
  • FY 2008 - $2.52 trillion.
  • FY 2007 - $2.57 trillion.
  • FY 2006 - $2.4 trillion.
  • FY 2005 - $2.15 trillion.
  • FY 2004 - $1.88 trillion.
  • FY 2003 - $1.72 trillion.
  • FY 2002 - $1.85 trillion.
  • FY 2001 - $1.99 trilion.
  • FY 2000 - $2.03 trillion.
  • FY 1999 - $1.82 trillion.
  • FY 1998 - $1.72 trillion.
  • FY 1997 - $1.58 trillion.
  • FY 1996 - $1.45 trillion.
  • FY 1995 - $1.35 trillion.
  • FY 1994 - $1.26 trillion.
  • FY 1993 - $1.15 trillion.
  • FY 1992 - $1.09 trillion.
  • FY 1991 - $1.05 trillion.
  • FY 1990 - $1.03 trillion.
  • FY 1989 - $991 billion.
  • FY 1988 - $909 billion.
  • FY 1987 - $854 billion.
  • FY 1986 - $769 billion.
  • FY 1985 - $734 billion.
  • FY 1984 - $666 billion.
  • FY 1983 - $601 billion.
  • FY 1982 - $618 billion.
  • FY 1981 - $599 billion.
  • FY 1980 - $517 billion.
  • FY 1979 - $463 billion.
  • FY 1978 - $399 billion.
  • FY 1977 - $356 billion.
  • FY 1976 - $298 billion.
  • FY 1975 - $279 billion.
  • FY 1974 - $263 billion.
  • FY 1973 - $231 billion.
  • FY 1972 - $207 billion.
  • FY 1971 - $187 billion.
  • FY 1970 - $193 billion.
  • FY 1969 - $187 billion.
  • FY 1968 - $153 billion.
  • FY 1967 - $149 billion.
  • FY 1966 - $131 billion.
  • FY 1965 - $117 billion.
  • FY 1964 - $113 billion.
  • FY 1963 - $107 billion.
  • FY 1962 - $100 billion.
  • FY 1961 - $94 billion.
  • FY 1960 - $93 billion.
  • FY 1789 - FY 1959 - $1.1 trillion. (Source: "Table 1.1—Summary of Receipts, Outlays, and Surpluses or Deficits (-): 1789–2018," OMB.) 

Understand the Current Federal Budget