How Money Has America Generated In Past 50 Years

Full REVENUES

The federal regime nerveless revenues of $3.5 trillion in 2019—equal to about 16.3 percent of gross domestic product (GDP) (figure 2). Over the past 50 years, federal acquirement has averaged 17.4 percent of GDP, ranging from twenty.0 percentage (in 2000) to 14.6 percent (virtually recently in 2009 and 2010).

Private INCOME Taxation

The private income revenue enhancement has been the largest single source of federal revenue since 1950, amounting to virtually l percent of the total and 8.i percent of Gdp in 2019 (effigy iii). In recent years, individual income taxation revenue has climbed as loftier equally 9.9 percentage of Gdp (in 2000) at the superlative of the 1990s economic smash and dropped as low every bit half-dozen.1 percent (in 2010) following the 2007–2009 Great Recession.

CORPORATE INCOME Tax

The tax on corporate profits yielded vii pct of government revenue in 2019, a acquirement source that has been trending downward. Revenue from the tax has fallen from an boilerplate of three.7 percent of GDP in the late 1960s to an average of simply 1.4 per centum of GDP over the by five years, and 1.1 percent of Gdp nearly recently in 2019 (effigy 3).

SOCIAL INSURANCE (PAYROLL) TAXES

The payroll taxes on wages and earnings that fund Social Security and the infirmary insurance portion of Medicare make upward the largest portion of social insurance receipts. Other sources include payroll taxes for the railroad retirement system and the unemployment insurance plan, and federal workers' pension contributions. In total, social insurance levies were 36 percent of federal revenue in 2019.

The creation of the Medicare program in 1965, combined with periodic increases in Social Security payroll taxes, caused social insurance receipts to grow from 1.half-dozen percent of Gross domestic product in 1950 to 6.2 percent in 2009 (figure iii). A temporary reduction in employees' share of Social Security taxes—office of the stimulus program following the financial meltdown—reduced social insurance receipts to 5.3 percent of GDP in 2011 and 2012. Social Insurance revenue enhancement receipts have since climbed back to v.9 percent of GDP in 2019.

FEDERAL EXCISE TAXES

Taxes on purchases of appurtenances and services, including gasoline, cigarettes, alcoholic beverages, and airline travel, generated ii.9 percent of federal acquirement in 2019. Just these taxes, too, are on the wane: excise taxation revenues have fallen steadily from an average of 1.seven percent of GDP in the late 1960s to an average of 0.five percent over 2015 to 2019 (figure 3).

OTHER REVENUES

The federal government likewise collects acquirement from manor and gift taxes, customs duties, earnings from the Federal Reserve System, and various fees and charges. In total, these sources generated 5.0 percent of federal revenue in 2019. They take ranged between 0.half-dozen and ane.0 percent of Gross domestic product since 1965 (figure 3). In recent years, the figure has been on the high end of that range because of unusually high profits of the Federal Reserve Board related to its efforts to stimulate the economic system since 2008.

SHARES OF TOTAL Acquirement

The individual income tax has provided well-nigh half of total federal revenue since 1950, while other revenue sources take waxed and waned (figure 4). Excise taxes brought in xix percentage of total revenue in 1950, but only nearly 3 percent in recent years. The share of revenue coming from the corporate income tax dropped from about one-3rd of the total in the early 1950s to 7 percent in 2019. In contrast, payroll taxes provided more than i-third of revenue in 2019, more than three times the share in the early 1950s.

Updated May 2020

Source: https://www.taxpolicycenter.org/briefing-book/what-are-sources-revenue-federal-government

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