U.S. Federal Government Tax Revenue

Who really pays the bills?

People discuss something in a conference room.

10'000 Hours / Getty Images

U.S. federal tax revenue is made up of the total tax receipts received by the government each year. Most of it is paid either through income taxes or payroll taxes. 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.
  • FY 2023 federal revenues aren't enough to pay for spending. That creates a projected $918 billion budget deficit.
  • Tax cuts implemented by Presidents Bush, Obama, and Trump to drive economic growth further reduced revenues.
  • Tax revenue has grown steadily over the past 60 years. It eclipsed $1 trillion for the first time in 1990.

Current Revenue

The U.S. government's total revenue is estimated to be $4.71 trillion for FY 2023.

Per the White House's projections, income taxes are slated to contribute $2.35 trillion. Another $1.59 trillion will come from payroll taxes. This includes $1.10 trillion for Social Security, $342 billion for Medicare, and $55 billion for unemployment insurance. Corporate taxes will add another $284 billion.

The White House also predicts the Federal Reserve, whose revenue comes from a variety of sources, will contribute $76 billion in 2023. 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. The remainder of federal revenue comes from excise taxes, tariffs on imports, miscellaneous receipts, and estate taxes.

How Revenue Relates to the Deficit, Debt, and GDP

The government's annual income doesn't cover its spending, which is projected to create a $918 billion budget deficit in 2023. Deficits add to the national debt

Many argue that Congress should only spend what it earns, but that depends on where the economy is in the business cycle. For example, Congress should use deficit spending to expand 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.


The government's 2023 tax revenue projection is 18.1% of gross domestic product (GDP), which is a measurement of a nation's economic output.

U.S. Tax Revenue by Year

Here's a record of income for each fiscal year since 1962. Tax receipts fell off during the recession but started setting new records by FY 2013.

Fiscal Year Revenue
FY 2021 $4.05 trillion
FY 2020 $3.42 trillion
FY 2019 $3.46 trillion
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 $2.78 trillion
FY 2012 $2.45 trillion
FY 2011 $2.30 trillion
FY 2010 $2.16 trillion
FY 2009 $2.11 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 $1.83 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 $1.06 trillion
FY 1990 $1.03 trillion
FY 1989 $991.1 billion
FY1988 $909.2 billion
FY 1987 $854.3 billion
FY 1986 $769.2 billion
FY 1985 $734.0 billion
FY 1984 $666.4 billion
FY 1983 $600.6 billion
FY 1982 $617.8 billion
FY 1981 $599.3 billion
FY 1980 $517.1 billion
FY 1979 $463.3 billion
FY 1978 $399.6 billion
FY 1977 $355.6 billion
FY 1976 $298.1 billion
FY 1975 $279.1 billion
FY 1974 $263.2 billion
FY 1973 $230.8 billion
FY 1972 $207.3 billion
FY 1971 $187.1 billion
FY 1970 $192.8 billion
FY 1969 $186.9 billion
FY 1968 $153.0 billion
FY 1967 $148.8 billion
FY 1966 $130.8 billion
FY 1965 $116.8 billion
FY 1964 $112.6 billion
FY 1963 $106.6 billion
FY 1962 $99.7 billion

Frequently Asked Questions (FAQs)

What is the main source of tax revenue for local governments?

Unlike the federal government, most local governments earn the majority of their revenue from property or sales taxes. Income taxes are less common at the local level, but localities in 11 states collect some portion of their revenue in those ways.

How does the government raise revenue?

One way for the federal government to increase revenue is to boost taxes. It has several options for exactly how to do this, though, and economists and policymakers frequently debate the effectiveness of each. Some examples of ways to increase federal tax revenues include directly increasing tax rates, raising rates on wealthier taxpayers, reducing tax exemptions and deductions, and boosting economic activity.

How much are federal taxes?

Federal income taxes are structured in graduated brackets ranging from 10% to 37% of your adjusted gross income. Long-term capital gains are taxed at a different rate, ranging from 0% to 20%.

Was this page helpful?
The Balance uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read our editorial process to learn more about how we fact-check and keep our content accurate, reliable, and trustworthy.
  1. The White House. "Budget for the U.S. Government: Fiscal Year 2023," Page 122.

  2. The White House. "Budget for the U.S. Government: Fiscal Year 2023," Page 123.

  3. Congressional Budget Office. "Historical Budget Data."

  4. Pew Charitable Trusts. "How Local Governments Raise Their Tax Dollars."

  5. The Tax Policy Center. "What Options Would Increase Federal Revenues?"

  6. IRS. "Topic No. 409 Capital Gains and Losses."

  7. IRS. "IRS Provides Tax Inflation Adjustments for 2023."

Related Articles