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 $3.654 trillion for fiscal year 2018. That's the most recent forecast from the Office of Management and Budget for October 1, 2017 through September 30, 2018. (Source: "," Office of Management and Budget, May 23, 2018.)

Sources

Where does the federal government's revenue come from? Individual taxpayers like you provide most of of it.

Income taxes contribute $1.836 trillion, half of the total. Another third ($1.224 trillion) comes from your payroll taxes. This includes $892 billion for Social Security, $270 billion for Medicare and $50 billion for unemployment insurance. 

Corporate taxes add $355 billion, only 10 percent. Customs excise taxes and tariffs on imports contribute $146 billion, just 4 percent

The Federal Reserve's net income adds $70 billion. Its revenue comes from a variety of activities. For example, the Fed is the bank for federal government agencies. It pays interest on the billions of dollars in operating funds deposited by these agencies. In addition, the Fed owns $4.4 trillion in U.S. Treasury securities. It acquired through quantitative easing. It earns interest on those notes and bonds. (Source: "," Board of Governors of the Federal Reserve System, January 10, 2017.)

The remaining $23 billion of federal income comes from estate taxes and miscellaneous receipts. (Source: "," Office of Management and Budget, May 23, 2018.)

Why Raising the Corporate Tax Rate Won't Help You

Shouldn't corporations pay more? It wouldn't matter. That's because corporations pass on their tax burden to you.

They will either raise prices or reduce wages. That's because they must maintain their profit margins at a certain level to satisfy stockholders. If taxes are raised, they must pass that on  to consumers or workers to keep share prices high. Thats why it doesn't 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 89 percent of spending, creating a $440 billion deficit. Shouldn't Congress only spend what it earns, just like you and me? It depends. Deficit spending boosts economic growth in a recession. That's when the government steps in to create jobs with stimulus spending.

Once the recession is over, the government should live within its means and spend less. It should raise taxes and cut spending. That will keep the economy from overheating and forming dangerous bubbles. Find out how this works in 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 itself 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 18.3 percent of GDP for FY 2018. That's lower than the historical 19 percent target. But that's because the Trump administration estimates GDP will increase 3 percent in FY 2018. That's at the high end of the range for the ideal growth rate

Revenues would be much higher without the extension of the Bush tax cuts and the Obama tax cuts. 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.

Now that the recession is over, those tax cuts should be reversed. That's the time to pay off the debt.

U.S. Tax Revenue by Year

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 by FY 2013.

  • FY 2017 (est.) - $3.460 trillion.
  • FY 2016 - $3.268 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: "," OMB.) 

Understand the Current Federal Budget