Where does your tax dollars go? Who pays federal taxes? What are tax expenditures? We explain the U.S. federal tax system in a few easy-to-understand charts. See more resources at http://www.fixthedebt.org/tax-reform-resource-page

1. Share of Each $100 Paid in Taxes
Health $25.39
Medicare $14.64
Medicaid $9.48
Other Health $1.27
Social Security $23.91
Defense and Military Benefits $20.32
Interest $6.05
Civilian Federal Retirement $2.64
Education $2.57
Transportation $2.43
Refundable Credits $2.30
Food Stamps $2.06
SSI $1.48
Justice $1.41
Housing Assistance $1.30
Foreign Aid $1.00
Natural Resource Protection $0.98
Unemployment Insurance $0.86
Child Nutrition $0.59
Other $4.71
Total $100
Where Tax Dollars Went In 2015
Source: CBO, OMB, Treasury Department

2. Where Does
The Federal
Government’s
Money Come
From?
Individual income and payroll taxes cover over two-
thirds of government spending.
In 2016, one-seventh of the government’s spending
will be financed by deficits.
Individual
Income
$1,626
Payroll
$1,099
Deficit
$534
Other
$309
Corporate
Income
$329
Billions
Source: Congressional Budget Office, March 2016 budget projections.

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. $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
Actual ProjectedTax Reform Act of 1986
Inflation-adjusted dollars
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.
Tax Breaks Have Grown Over Time
Source: U.S. Department of the Treasury, compiled by the National Priorities Project.

5. 14%
16%
18%
20%
22%
24%
26%
1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 2024 2026
Revenues
50 Year Avg.
Spending = 20.2%
Actual
50 Year Avg.
Revenues = 17.4%
Spending
Projected
Revenues Don’t Cover Spending
Percent of GDP
Source: Congressional Budget Office, March 2016 budget projections.

6. 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 a
quarter of spending.
Tax Expenditures: Another Kind of Spending
Source: Congressional Budget Office, Joint Committee on Taxation
Individual and
Corporate Tax
Expenditures
25%
Other
10%
Interest
5%
Non-Defense
Discretionary 12%
Defense
Discretionary
11%
Health Care
20%
Social
Security
17%

7. $0
$20
$40
$60
$80
$100
$120
$140
Housing* Education** Income Support***
Tax Expenditures Program Spending
Billions, FY2014
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

8. 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
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
Source: Joint Committee on Taxation
Additional GDP Growth After 10 Years