WASHINGTON (Reuters) – The U.S. government’s over $4 trillion annual budget, the world’s largest, relies heavily on individual wage earners whose taxes and retirement benefits are deducted from every paycheck, leaning particularly on the top 20% of income earners.
Corporations pay just a fraction of what individuals do into the federal spending pool, which funds the military, transportation safety, veterans benefits, regulatory agencies and programs like NASA.
A New York Times investigation here published on Sunday shows that President Donald Trump paid just $750 in federal taxes during the years straddling his 2017 inauguration, and none at all for 10 of 15 years before then. Trump dismissed the report as “fake news.”
Trump reported here income of at least $594 million for 2016 and early 2017 and assets worth at least $1.4 billion, in a financial disclosure in June 2017.
HOW THE U.S. BUDGET IS FUNDED
Individuals, whether they are self-employed or earn a paycheck from a small business or a giant corporation, foot most of the federal government’s bills.
Individual income tax funds U.S. federal spending:
Of the $3.46 trillion in receipts taken in by the U.S. Treasury during fiscal 2019, nearly half came from the $1.72 trillion in individual income taxes collected.
In addition, $1.24 trillion in Social Security and Medicare taxes were paid by individuals, bringing their share to 85%.
Taxes paid by corporations last year totaled $230 billion, or just 6.6% of the total in 2019. The remainder of federal revenues are made up from customs duties on imported goods, excise taxes such as those on gasoline, estate taxes and other miscellaneous taxes and fees.
WHO PAYS THE MOST?
W2 wage earners – those with a regular paycheck