The Federal government The U.S. federal government collects about two-thirds of the taxes in the economy. e The largest source of revenue for the federal government is the individual income tax
The Federal Government • The U.S. federal government collects about two-thirds of the taxes in the economy. • The largest source of revenue for the federal government is the individual income tax
Receipts of the Federal Government: 1999 VS. 2001 Tax(1999) Amount Amount Percent (billions) (per person) of Receipts ndividual income taxes s869 s3,194 48% Social insurance taxes 609 2239 34 Corporate income taxes 182 669 10 lothe er 146 537 8 otal $1,806 6,639 100 Tax(2001) Amount mount Percent (billions) (per person) of Receipts Individual income taxes $994 3,488 50% Social insurance taxes 694 2435 35% Corporate income taxes 151 530 Other 152 533 8 Total s1991$6986100%
Receipts of the Federal Government: 1999 vs. 2001 Tax(1999) Amount (billions) Amount (per person) Percent of Receipts Individual income taxes $869 $3,194 48% Social insurance taxes 609 2,239 34 Corporate income taxes 182 669 10 Other 146 537 8 Total $1,806 $6,639 100% Tax (2001) Amount (billions) Amount (per person) Percent of Receipts Individual income taxes $994 $3,488 50% Social insurance taxes 694 2,435 35% Corporate income taxes 151 530 8% Other 152 533 8% Total $1,991 $6,986 100%
Tax liability o With respect to paying income taxes, an individuals tax liability(how much he/she owes)is based on total income The marginal tax rate is the tax rate applied to each additional dollar of Income Higher-income families pay a larger percentage of their income in taxes
Tax Liability • With respect to paying income taxes, an individual’s tax liability (how much he/she owes) is based on total income. • The marginal tax rate is the tax rate applied to each additional dollar of income. • Higher-income families pay a larger percentage of their income in taxes
Federal Income tax rate 1999s.2001 1999 On Taxable Income The Tax Rate is Upto$25750 150% From$25,750to$62450 28.0 From$62,450to$130250 31.0 From$130,250to$283,150 36.0 Over$283150 39.6 2001 On taxable income The Tax Rate Is Up to $27,050 150% From$27,050to$65550 27.5 From S65550to$136750 30.5 From$136,750tos297350 355 Over$297350 391
Federal Income Tax rate: 1999 vs. 2001 On Taxable Income… The Tax Rate Is . . . Up to $25,750 15.0 % From $25,750 to $62,450 28.0 From $62,450 to $130,250 31.0 From $130,250 to $283,150 36.0 Over $283,150 39.6 On Taxable Income… The Tax Rate Is . . . Up to $27,050 15.0 % From $27,050 to $65,550 27.5 From $65,550 to $136,750 30.5 From $136,750 to $297,350 35.5 Over $297,350 39.1 1999 2001
Federal Government Spending 1999 Amount Amount per Percent of Category (billions) Person Spending Social security $393 $1,445 23% National defense 277 1,018 16 Net interest 243 893 Income security 227 837 13 Medicare 205 754 12 Health 143 526 8 Other 239 879 14 Total $1,727 6350 100%
Federal Government Spending: 1999 Category Amount (billions) Amount per Person Percent of Spending Social security $ 393 $1,445 23% National defense 277 1,018 16 Net interest 243 893 14 Income security 227 837 13 Medicare 205 754 12 Health 143 526 8 Other 239 879 14 Total $1,727 $6,350 100%