See also: Taxation in the United States and United States federal budget
Taxes are levied in the United States at the federal, state and local government level. These include taxes on income, payroll, property, sales, imports, estates and gifts, as well as various fees. In 2010 taxes collected by federal, state and municipal governments amounted to 24.8% of GDP.[295] During FY2012, the federal government collected approximately $2.45 trillion in tax revenue, up $147 billion or 6% versus FY2011 revenues of $2.30 trillion. Primary receipt categories included individual income taxes ($1,132B or 47%), Social Security/Social Insurance taxes ($845B or 35%), and corporate taxes ($242B or 10%).[296]
U.S. taxation is generally progressive, especially the federal income taxes, and is among the most progressive in the developed world,[297] but the incidence of corporate income tax has been a matter of considerable ongoing controversy for decades.[298][299] In 2009 the top 10% of earners, with 36% of the nation's income, paid 78.2% of the federal personal income tax burden, while the bottom 40% had a negative liability.[300] However, payroll taxes for Social Security are a flat regressive tax, with no tax charged on income above $113,700 and no tax at all paid on unearned income from things such as stocks and capital gains.[301][302] The historic reasoning for the regressive nature of the payroll tax is that entitlement programs have not been viewed as welfare transfers.[303][304] The top 10% paid 51.8% of total federal taxes in 2009, and the top 1%, with 13.4% of pre-tax national income, paid 22.3% of federal taxes.[300] In 2013 the Tax Policy Center projected total federal effective tax rates of 35.5% for the top 1%, 27.2% for the top quintile, 13.8% for the middle quintile, and −2.7% for the bottom quintile.[305][306]State and local taxes vary widely, but are generally less progressive than federal taxes as they rely heavily on broadly borne regressive sales and property taxes that yield less volatile revenue streams, though their consideration does not eliminate the progressive nature of overall taxation.[299][307]
During FY 2012, the federal government spent $3.54 trillion on a budget or cash basis, down $60 billion or 1.7% vs. FY 2011 spending of $3.60 trillion. Major categories of FY 2012 spending included: Medicare & Medicaid ($802B or 23% of spending), Social Security ($768B or 22%), Defense Department ($670B or 19%), non-defense discretionary ($615B or 17%), other mandatory ($461B or 13%) and interest ($223B or 6%).[296]
