Taxes are by far the largest source of revenue for the federal government. While the government does receive revenue from several other sources, those revenues are dwarfed by how much citizens collectively pay in taxes.
The average taxpayer in Pennsylvania paid $15,998 in federal income taxes in 2024, $1,768 less than the national average. Would you like to know where that money went?
$3,9701 paid for health care, including $1,641 for Medicaid, $1,493 for Medicare, $134 for the National Institutes of Health, $42 for the Centers for Disease Control and Prevention, and $27 for substance abuse and mental health programs.
$3,339 was spent on war and weapons, including $2,638 for the Pentagon, $1,288 for contractors at the Pentagon, $550 for military personnel at the Pentagon, $350 for top 5 contractors at the Pentagon, $104 for nuclear weapons, $80 for aid to foreign militaries, $6 for Israel’s war, $40 for the F-35 fighter jet, and $5 for SpaceX contracts, but only 35 cents for DEI, Diversity, Equity, Inclusion.
$3,109 was the cost of interest on the national debt.
$950 went for unemployment and other benefits, including: $163 for Temporary Assistance for Needy Families (TANF), $83 for Child Tax Credits, $24 for refugee assistance, and $15 for LIHEAP the Low-Income Home Energy Assistance Program, but less than a dollar was for the National Labor Relations Board to protect workers’ rights.
$733 funded the Department of Education, including $376 for college aid, $26 for K-12 schools, $2 for the Corporation for Public Broadcasting, and just one dollar for museum and library Services.
$647 was spent on food and agriculture, including: $402 for food stamps (SNAP), $109 for school lunch and child nutrition programs, $26 for the Farm Services Agency, and $15 for Women, Infants, and Children (WIC).
$587 was the cost of governmental functions such as $140 for the Federal Deposit Insurance Corporation, $71 for the Internal Revenue Service, $28 for the Federal Court System, $47 for Federal Court System’s Public Defenders, $4 for the Postal Service, and $3 for the Consumer Financial Protection Bureau, but only 37 cents for the Minority Business Development Agency and a penny for the Interagency Council on Homelessness.
$551 was spent on housing and community, including $195 for the Federal Emergency Management Agency (FEMA), $170 for FEMA’s Disaster Relief Fund, $162 for the Department of Housing and Urban Development (HUD), $35 for Head Start, and $22 for public housing.
$340 went for energy and the environment, including $115 for the Environmental Protection Agency (EPA), $35 for the Fire Service, $23 for the National Oceanic and Atmospheric Administration, $23 for energy efficiency and renewable energy, and $30 for the National Park Service.
$210 was spent on international affairs, including$47 for diplomacy, $35 for the U.S. Agency for International Development (USAID), and $28 for USAID Climate Aid.
$206 funded law enforcement, including $88 for deportations and border control, and $26 for federal prisons.
$178 paid for transportation, including $34 for highways, $27 for public transit, $21 for the Transportation Security Administration (TSA), $21 for the Federal Aviation Administration (FAA), and $12 for Amtrak and rail service.
$127 was used for science, including $69 for the National Aeronautics and Space Administration (NASA), $30 for the National Science Foundation, and $5 for SpaceX contracts.
Income taxes paid by individuals are the federal government’s single largest source of revenue, nearly 50 percent. The income tax system is designed to be progressive, meaning the wealthy are meant to pay a larger percentage of their earnings than middle- or low-income earners. However, due to the complexity of the tax code, this is not what’s happening. In many cases, wealthy individuals end up paying a smaller portion of their income as taxes than the people who work for them.
Federal income tax rates range from 10 percent for the lowest incomes to a 37 percent marginal tax rate for the highest incomes. Tax rates have changed significantly over time. Not long ago, the top marginal income tax rate was as high as 90 percent for the very highest incomes. No one paid 90 percent of their income in taxes, but people with very high incomes had to pay most of their earnings above a certain high threshold. Meanwhile, some sources of income are taxed at lower rates, such as income from certain investments.
Payroll taxes for Social Security and Medicare, taken directly from paychecks and matched by employers, are the second largest source of revenue, about one-third.
In 2017, Congress reduced the top corporate tax rate from 35 percent to 21 percent. Consequently, corporate tax revenue now makes up less than eight percent of federal revenue. Until the 1980s, corporate tax revenue was twice that amount.
There are a few other taxes, such as customs duties and excise taxes, but they make up much smaller portions of federal revenue.
Mark Berg is a community activist in Adams County and a proud Liberal. His email address is MABerg175@Comcast.net.
I noticed you listed SpaceX contracts twice. Is that a particular concern, or are you double dipping?