Taxpayer’s Contribution to Federal Revenue

Sources of Federal  Tax Revenue, Fiscal Year 2010


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Imagine individual income taxpaying citizens being governed by the principle “for the people,” and allowed to democratically designate 40 percent of their federal income taxes to areas of governance they choose to support?

Allowing taxpayers to choose and designate part of their federal income taxes dollars would not necessarily be detrimental to any government operations.

The individual federal income tax composes 42 percent of the total federal tax revenue (Figure 1). Given individual taxpayers are allowed to designate 40 percent of their tax dollars to government agencies of their choice, the overall impact would be citizens directing around 17 percent of the total federal budget, which accounts for as much as 43 percent of discretionary spending (Figure 2), which is less than what the government domestically spends (Figure 3). Some taxpayers may opt to designate funds as payment towards reducing the federal deficit or contribute to mandatory spending entitlement programs (Figure 4 – Welfare, Medicare, & Social Security); thereby shifting contributions into mandatory spending categories rather than discretionary spending.

Even within a budget structure providing for individual taxpayer distributions, the national defense budget would not necessarily be touched (Figure 3 – defense consumes 51% of discretionary spending) and remain intact.

In the long run, citizens who help direct governance with a percentage of their tax dollars might become motivated to be more informed of government operations.

Taxpayer Share of Federal Government



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U.S. Jobs Critical for a Healthy Economy

Sources of Federal  Tax Revenue, Fiscal Year 2010


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When you look at the Federal Government Revenue Sources chart (Figure 1) you will see the largest percent of revenue (42%) comes from the individual income taxes, which are mostly deducted from your paycheck (given you are employed). The next largest stream of revenue the government receives comes from companies paying payroll taxes (40%). Corporate taxes (9%), excise taxes (3%) and other sources (6%) of revenue make up relatively small portion of federal revenue (18%).  Just payroll taxes combined with personal income taxes form 82 percent of the government’s revenue. Therefore, jobs are the key, fundamental, underlying source of federal government revenues.

Sources of Federal Revenue, Fiscal Years 1950-2010How are U.S. corporations contributing to the U.S. job market? They have been exporting manufacturing and service jobs to other countries to increase their profits at the expense of shrinking the U.S. job market and thereby the tax dollars available to the federal government.

Further harm to the United States economy has been inflicted by United States corporations when they support the “need” for building new industrial centers in other countries. The building related industries in the United States are negatively impacted, losing the opportunities to create jobs and build within territorial United States. Corporations have multiplied the negative impact on the economy via less jobs among those who make tools, who make building materials, the transportation industry, and laborers building the business structure—and continuing—future employment of those occupying the new facility.

From a “free” market perspective, while corporations continue to cut expenses to increase profiteering, they have created very large, negative externalities.  The outcomes have not been a positive for funding governmental needs, and for dislocating thousands of U.S. citizens who were given away their jobs.



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