The government provides public goods that need to be paid for…somehow. Often this is done with tax revenue. In the case of the U.S. federal government, the composition is illustrated above (in honor of Pi Day, we had to show a pie chart). But the composition of tax receipts has changed over time, which is illustrated below. In the graphs, we see there are four main sources of income: 1) Social Security tax, whose share increased over the first half of our sample, as its tax rate was adapted to finance an older population retiring earlier. 2) Personal income tax, whose share has been surprisingly stable in the lower 40% for 70 years. 3) Import and production taxes, whose share has shrunk considerably, especially as many tariffs have been abolished. 4) Corporate income tax, which has a reputation for being very high in international comparisons and yet yields a relatively small and decreasing share of total federal receipts. If you look closely, you will also notice some interesting fluctuations, such as an increase in 2013-14 in income from assets (in red; the sale of the assets accumulated in the previous years to bail out some firms).
How these graphs were created: Start from the Federal Government Current Receipts and Expenditures release, select the series you want to display, and click on “Add to Graph.” For the top graph, change graph type to “Pie.” For the bottom graph, change the graph type to “Area” with stacking set to “Percent.” At the time this post was written, the corporate income tax data weren’t yet available for 2015:Q4, so the last data point was removed.
Suggested by Christian Zimmermann