U.S. federal tax revenue is made up of the total tax receipts received by the government each year. Most of it is paid either through income taxes or payroll taxes. The rest is made up of estate taxes, excise and customs duties, and interest on the Federal Reserve's holdings of U.S. Treasurys.

The Federal Government's Current Revenue

The U.S. government estimates its total revenue to be $5.49 trillion for fiscal year 2025.

Per the White House's projections, income taxes are slated to contribute $2.6 trillion. Another $2.2 trillion should come from payroll taxes. This includes $1.3 trillion for Social Security, $399 billion for Medicare, and $56 billion for unemployment insurance. Corporate taxes would add another $467 billion.

The remainder of federal revenue comes from excise taxes, tariffs on imports, miscellaneous receipts, and estate taxes.

How Revenue Relates to the Deficit, Debt, and GDP

The government's annual income doesn't cover its spending, which was projected to create a $1.8 trillion budget deficit in 2025. Deficits add to the national debt.

Many argue that Congress should only spend what it earns, but that depends on where the economy is in the business cycle. For example, some argue Congress should use deficit spending to expand economic growth in a recession and stimulus spending to create jobs. Once the recession is over, the government should then switch from expansionary to contractionary fiscal policy because it's the best time to raise taxes and reduce the deficit and national debt. It also keeps the economy from overheating and forming dangerous bubbles.

U.S. Tax Revenue by Year

Here's a record of income for each fiscal year since 1962. Tax receipts fell off during the 2007–2009 recession but started setting new records by fiscal year 2013. They fell off again during the brief 2020 recession and then resumed their upward climb until the fiscal year 2023, when lower income tax collections driven by Trump's tax cuts pushed overall revenue lower.