Who pays more to the Federal Government – people or companies?

Over the tax season, a couple of clients wondered where the government got most of their money from in taxes (sure seeing their tax bills had something to do with the question!).  So, I did some digging (Congressional Records & Department of Treasury releases) and found that approximately $2.8 trillion was collected by the US Government during 2013.  The largest percentage of tax revenue came from Individual Income Tax (47%), followed by Payroll Taxes (32%) and Corporate Income Tax (10%).  These percentages have no doubt changed over the years, especially when corporate tax rates were much higher and Estate & Gift Taxes were lower.

2013 Tax Revenue SourcesThe ‘Miscellaneous’ category is probably made up of various fees (such as penalties & interest) collected by the revenue agencies, as well as smaller taxes, such as the highway use tax paid by truckers & other cargo carriers, among other items.

Payroll taxes are split between companies and individual and companies also pay Unemployment Insurance.  Your paycheck withholding for ‘Medicare & Social Security’ is in this category.

Please note that companies that have employees get a deduction on their income tax return for their portion of payroll taxes, as well as employee wages.

Have any thoughts or questions?  Please feel free to leave them below:

Cheers!

Thomas C. Hodge, CPA
President

The Hodge Group
3040 N. Menard Avenue
Chicago, IL 60634

773.237.6369

www.thehodgegroup.com

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