Question of the Day: For every $1 of corporate income taxes collected, the U.S. government collected $___ from individuals?
Individual income taxes = 1.7 trillion
Corporate income taxes = $230.2 billion
- What’s the single largest source of taxes for the U.S. federal government?
- What are the two payroll taxes that make up the category “social insurance” taxes? Hint: One has “social” in its name.
- The number of workers employed in the U.S. has grown over the past few years. Which tax categories would be impacted by this employment growth?
- Based on the data in the chart, what will have a bigger impact on tax collections: a 10% reduction in individual income taxes collected or a 20% reduction in corporate taxes collected?
Behind the numbers (From St. Louis Fed)
If you live or work in this country, most likely you contribute to the revenue of the United States. The majority of revenue collected by the federal government comes from taxes.
Half of U.S. government revenue in 2019, about $1.7 trillion, came from the public via individual income taxes, of which a significant amount came from payroll taxes, which are paid by employees.
The second largest source is Social Security and Medicare taxes, which go to support those programs. Unemployment insurance, which is paid for by your employer, makes up a small part as well. Other sources of tax revenue include corporate, estate, and excise taxes. (Excise taxes are those paid when purchases are made on a specific good, such as gasoline).
About the Authors
Tim's saving habits started at seven when a neighbor with a broken hip gave him a dog walking job. Her recovery, which took almost a year, resulted in Tim getting to know the bank tellers quite well (and accumulating a savings account balance of over $300!). His recent entrepreneurial adventures have included driving a shredding truck, analyzing executive compensation packages for Fortune 500 companies and helping families make better college financing decisions. After volunteering in 2010 to create and teach a personal finance program at Eastside College Prep in East Palo Alto, Tim saw firsthand the impact of an engaging and activity-based curriculum, which inspired him to start a new non-profit, Next Gen Personal Finance.
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