Where Does the Government's Money Come From?
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The U.S. Constitution begins with poetry.
A more perfect union; justice and domestic tranquility; a common defense and general welfare; the blessings of liberty.
These are the lovely ideals that define the American experiment and make-up much of our national identity.
But you know what? This poetry takes up exactly 52 words of the Constitution, or approximately 1% of its content. One percent (we did the math!) And that's not counting the Bill of Rights or other amendments.
What's in the other 99% of the Constitution? Well, logistics. The nitty gritty. The "here's how we're gonna do it" part of establishing a new form of government. And a whole lot of that can be boiled down to two words: taxes and spending.
Let's start with taxes; (watch this space for the companion article about spending).
Where Does the Government's Money Come From?
Our partners at USAFacts doggedly distill disparate datasets about these essential questions:
Who pays taxes? How much do different entities pay? And how much money does the government take in overall? Let's tackle some of these questions:
- The Government takes in $5.2 trillion dollars a year, almost all of which is from tax revenue. This estimate, from USAFacts, is based on data from 2015, and includes revenues from federal, state and local taxes.
- Japan's government collects the second highest total amount in taxes, which is equal to about $1.4 trillion dollars (according to data from the OECD).
- In fact, you'd have to combine the tax revenues of Japan, Germany, France and the United Kingdom to come close to the total amount of dollars the United States takes in every year (again, according to OECD data).
- More than half of the U.S. government's money comes from Individual income taxes and wage earners' payroll taxes.
- Corporate income taxes make up about 8% of total tax revenue.
Want more? Check out this interactive map of government finances built by the brilliant data-crunchers at USAFacts.
Why Should You Care? Because You Already Do.
It's true, these are gob-smacking numbers. But they matter deeply. Because, as the Constitution teaches us, Americans' ideals are the foundation of who we are; the real work of our democracy, though, is in the logistics. The nitty gritty. The "here's how we're gonna do it" part that plays out in every debate, bill and action of the government. It's critical, therefore, that you have reliable, consistent streams of information.
-- Andrea Seabrook, Managing Editor
This is the first of a pair of articles. The second comes out later this week.
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