Individual income and payroll taxes cover over two-thirds of government spending. In 2015, one-eighth of the government’s spending will be financed by deficits. The top 20% of households pay almost 70% of the nation’s taxes, with the top 1% paying nearly a quarter. Tax expenditures have grown over time and now equal over a quarter of total government spending.

1. Individual income and payroll taxes cover over two-
thirds of government spending.
In 2015, one-eighth of the government’s spending will
be financed by deficits.
Where Does The
Federal
Government’s
Money Come
From?
Source: Congressional Budget Office, March 2015 budget projections.
Deficit
$486
Individual
Income
$1,506
Payroll
$1,056
Corporate
Income
$328
Other
$302
Billions

2. Income Tax Rates
0%
5%
10%
15%
20%
25%
30%
35%
40%
0 $50k $100k $150k $200k $250k $300k $350k $400k $450k $500k
Gross Income
Marginal Rate
Average Rate
(Tax rates in 2014 for a married couple filing jointly)

3. Who
Pays
Federal
Taxes?
Source: Congressional Budget Office,
“The Distribution of Household Income and Federal Taxes, 2011.”
Bottom 20%
0.6% Second 20%
4%
Middle 20%
9%
Fourth 20%
18%
81st to 99th
Percentiles
45%
Top 1%
24%
The top 20% of
households pay almost
70% of the nation’s taxes.
The top 1% is responsible
for paying nearly a
quarter.
(Percentage of all federal taxes paid, by household income)

4. 10%
12%
14%
16%
18%
20%
22%
24%
26%
1990 1995 2000 2005 2010 2015 2020 2025
Revenues Don’t Cover Spending
Source: Congressional Budget Office, March 2015 budget projections.
Percent of the economy (GDP)
Actual Projected
20.2%SPENDING
AVERAGE
17.2%REVENUES
AVERAGE
Deficit

5. $0
$200
$400
$600
$800
$1,000
$1,200
$1,400
$1,600
1974 1978 1982 1986 1990 1994 1998 2002 2006 2010 2014 2018
Tax Breaks Have Grown Over Time
Actual Projected
Source: U.S. Department of the Treasury, compiled by the National
Priorities Project.
Inflation-adjusted dollars
Tax Reform Act of 1986
There is now twice as much money in “tax expenditures” – deductions, credits, and other
tax breaks – as there was after Congress last overhauled the tax code in 1986.

6. Source: Congressional Budget Office, Joint Committee on Taxation
Tax Expenditures: Another Kind of Spending
Tax Expenditures aren’t part
of the budget that Congress
passes every year, but are
similar to government
spending programs. Think
about it: $1,000 given out in
Pell grants and $1,000 given
out through education tax
credits will both give $1,000
to students.
If they were counted as a
normal part of the budget,
tax expenditures would be
over a quarter of spending.
Tax
Expenditures
26%
Social Security
18%
Health Care
19%
Defense
13%
Non-Defense
Discretionary
12%
Interest
5%
Other, 7%

7. High Earners Benefit Most From Tax Expenditures
Most tax expenditures
are regressive and
provide a bigger benefit
to the wealthy. The top
20% receives 50% of the
benefit from the largest
tax expenditures.
Percent of “major” tax expenditures received
0%
10%
20%
30%
40%
50%
60%
Lowest
Quintile
Second
Quintile
Middle
Quintile
Fourth
Quintile
Highest
Quintile
Top
1%
Source: Congressional Budget Office, “The Distribution of Major Tax Expenditures in the
Individual Income Tax System.”
Note: Graph shows ten “major” income tax expenditures as identified by Congressional
Budget Office, which make up two-thirds of total tax expenditures by dollar amount.

8. Tax Expenditures Rival Spending Programs in
Size
*Spending represented by HUD Budget. Source: Office of Management and Budget, President’s Budget FY 2016; Joint Committee on Taxation
**Spending represented by Pell Grants. Source: Joint Committee on Taxation
*** Refundable credits include EITC and Child Tax Credit. Spending includes SSI,TANF, and Foster Care Assistance. Source: HHS, SSA
$0
$20
$40
$60
$80
$100
$120
$140
Housing* Education** Income Support***
Tax Expenditures Program Spending
Billions, FY2014

9. U.S. Has World’s Highest Corporate Tax Rate, but
Only Average Collection
The official U.S. corporate tax rate is the highest in the developed world, but the
average rate paid after deductions and credits is more typical.
Source: U.S. Department of the Treasury, “The President’s Framework for
Business Tax Reform.” Data from Fiscal Year 2011.
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
United States UK Italy Canada Germany France
MarginalCorporateTaxRate
Statutory Rate
Effective Rate

10. The Tax Reform Act of 2014 would have increased the size of the economy by between 0.1
percent and 1.6 percent by 2023.
Tax Reform Promotes Economic Growth
0.0%
0.2%
0.4%
0.6%
0.8%
1.0%
1.2%
1.4%
1.6%
1.8%
MEG Model, Low Change In
Employment
MEG Model, High Change In
Employment
OLG Model
Low Estimate High Estimate
Source: Joint Committee on Taxation

11. Where Tax Dollars Went In 2014
Share of Each $100 Paid in Taxes
Social Security $24.11
Health $23.72
Medicare $14.42
Medicaid $8.60
Other Health $0.69
Defense and Military Benefits $21.49
Interest $6.54
Civilian Federal Retirement $2.86
Transportation $2.62
Refundable Credits $2.45
Food Stamps $2.18
Education $1.84
Supplemental Security Income $1.54
Justice $1.44
Housing Assistance $1.36
Unemployment Insurance $1.26
Natural Resource Protection $1.03
Foreign Aid $1.00
Agriculture $0.70
Other $3.87
Total $100