US Federal Government Tax Revenue

Who Really Pays Uncle Sam's Bills?

Federal government revenue
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U.S. federal tax revenue is the total tax receipts received by the federal government each year. Most of it is paid either through income taxes or payroll taxes. In fiscal year (FY) 2021, income taxes will account for 50%, payroll taxes make up 36%, and corporate taxes supply 7%. The rest is made up of estate taxes, excise and custom duties, and interest on the Federal Reserve's holdings of U.S. Treasurys. 

Key Takeaways

  • The bulk of federal tax revenue comes from income taxes, payroll taxes, and corporate taxes.
  • The FY 2021 federal revenues do not cover that fiscal year’s federal expenses. Instead, the government will accrue a $966 billion budget deficit.
  • Tax cuts implemented by Presidents Bush and Obama to drive economic growth further reduced government revenues. 

Current Revenue

The U.S. government's total revenue is estimated to be $3.863 trillion for FY 2021.

Income taxes will contribute $1.932 trillion. Another $1.373 trillion will come from payroll taxes. This includes $1.011 trillion for Social Security, $308 billion for Medicare, and $43 billion for unemployment insurance. Corporate taxes will add another $284 billion. The Tax Cut and Jobs Act cut taxes for corporations much more than it did for individuals. In 2015, corporations paid 11%, and income taxpayers paid 47%.

The Federal Reserve, whose revenue comes from a variety of sources, contributes $71 billion. The Fed is the bank for federal government agencies, and it pays interest on the billions of dollars in operating funds deposited by these agencies. In addition, the Fed owns $4 trillion in U.S. Treasury securities that it acquired through quantitative easing.

The remainder of federal revenue comes from excise taxes ($87 billion), tariffs on imports ($54 billion), estates taxes ($22 billion), and miscellaneous receipts ($40 billion).

How Revenue Relates to the Deficit, Debt, and GDP

The government's annual income doesn't cover its spending, which creates a $966 billion budget deficit. Many argue that Congress should only spend what it earns, but that depends on where the economy is in the business cycle. Congress should use deficit spending to boost economic growth in a recession and stimulus spending to create jobs.

Once the recession is over, the government should switch from expansionary to contractionary fiscal policy because it's the best time to raise taxes and reduce the deficit and national debt. It also keeps the economy from overheating and forming dangerous bubbles. Current revenue collected equals 16.5% of gross domestic product, which is a nation's measurement of economic output. 

When that much production is going to the federal government, it’s best to reinvest it into the economy to support future growth.

Revenues were also lowered by the extension of the Bush tax cuts and the Obama tax cuts, which fought the 2001 recession and the 2008 recession, respectively, by spurring the consumer spending that drives almost 70% of economic growth.

U.S. Tax Revenue by Year

Here's a record of income for each fiscal year since 1789. Tax receipts fell off during the recession but started setting new records by FY 2013.

Fiscal Year Revenue
FY 2021 $3.86 (estimated)
FY 2020 $3.71 trillion (estimated)
FY 2019 $3.46 trillion (actual)
FY 2018 $3.33 trillion
FY 2017 $3.32 trillion
FY 2016 $3.27 trillion
FY 2015 $3.25 trillion
FY 2014 $3.02 trillion
FY 2013 $2.77 trillion
FY 2012 $2.45 trillion
FY 2011 $2.30 trillion
FY 2010 $2.16 trillion
FY 2009 $2.10 trillion
FY 2008 $2.52 trillion
FY 2007 $2.57 trillion
FY 2006 $2.41 trillion
FY 2005 $2.15 trillion
FY 2004 $1.88 trillion
FY 2003 $1.78 trillion
FY 2002 $1.85 trillion
FY 2001 $1.99 trillion
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
FY1988 $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 1789–1959 $1.1 trillion
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Article Sources

  1. The White House. “A Budget for America’s Future: FY 2021,” Table S-4. Accessed Feb. 13, 2020.

  2. The Federal Reserve. "Credit and Liquidity Programs and the Balance Sheet." Accessed Jan. 19, 2020.

  3. The White House. “A Budget for a Better America, Fiscal Year 2020, Budget of the U.S. Government.” Accessed Jan. 19, 2020.

  4. The White House. “A Budget for America’s Future: FY 2021,” Table S-5. Accessed Feb. 13, 2020.

  5. Bureau of Economic Analysis. “National Income and Product Accounts Tables: Table 1.1.5. Nominal GDP,” Divide the figure for "Personal Consumption Expenditures" by total GDP. Accessed Jan. 19, 2020.

  6. Congressional Budget Office. "Historical Budget Data." Accessed Jan. 19, 2020.