Source: Pew Research Center
As Congress and the White House pivot from trying to repeal the Affordable Care Act to overhauling the U.S. tax code, it’s helpful to take a closer look at how the tax system works presently in the context of its recent history.
Individual income taxes are the federal government’s single biggest revenue source. In fiscal year 2017, which ended Sept. 30, the individual income tax was expected to bring in nearly $1.66 trillion, or about 48% of all federal revenues, according to the Office of Management and Budget. The corporate income tax was estimated to raise another $324 billion, or 9% of total federal revenue.
The rest of the federal government’s revenue comes from a mix of sources, including Social Security and Medicare payroll taxes, excise taxes such as those on alcohol and gasoline, unemployment-insurance taxes, customs duties and estate taxes. Spending that’s not covered by taxes is paid for by borrowing.