Economic Report of the President

TABLE 3-1.— Sources of Federal Revenues, Fiscal Year 2005SourceBillions ofdollarsPercent oftotal revenuesPercent ofGDPIndividual income taxes .............................................. 894 43.5 7.3Corporation income taxes ........................................... 227 11.0 1.9Social insurance receipts............................................ 774 37.7 6.3Excise taxes................................................................. 74 3.6 .6Estate and gift taxes .................................................. 24 1.2 .2Customs duties ........................................................... 25 1.2 .2Miscellaneous receipts................................................ 36 1.8 .3Total ............................................................................ 2,053 100.0 16.8Note: Detail may not add to totals because of rounding.Source: Office of Management and Budget, Budget of the United States Government, Fiscal Year 2006.economic stimulus provisions that expired at the end of December 2004, butis projected to return to the historical average under proposed policies. Thelargest share of revenues (over 92 percent) comes from taxes on income andits components: the individual income tax (43.5 percent), payroll taxes forSocial Security and other social insurance programs (nearly 38 percent), andthe corporate income tax (11 percent).Even when state and local taxes are included, the United States relies moreon taxes on income than most other developed countries (Table 3-2). Over70 percent of taxes imposed by all levels of government in the United Statesare individual income, corporate profit, and payroll taxes, compared to the62 percent average for all Organization for Economic Cooperation andDevelopment (OECD) countries. The United States relies much less on taxeson consumer goods and services (under 18 percent) than other countries(32 percent average). Much of this difference reflects higher total tax burdensin other OECD countries, which generally impose value added taxes (VATs)on sales of goods and services in addition to income and payroll taxes.TABLE 3-2.— Comparison of Tax Revenues: United States, G-7, and OECD, 2002[Includes subnational governments]Revenue sourceUnitedStatesCanada France Germany Italy JapanUnited OECDKingdom averagePercentTotal revenue as percent of GDP ......... 26.4 33.9 44.0 36.0 42.6 25.8 35.8 36.3Revenue by type as percent of total:Income and profit............................... 44.4 46.2 23.9 28.0 32.5 30.6 37.8 35.3Social security and payroll................. 26.1 17.2 39.5 40.3 29.4 38.3 17.0 26.3Property and wealth 1 .......................... 11.9 9.8 7.5 2.3 5.1 10.8 12.0 5.5Goods and services ............................ 17.6 26.3 25.4 29.2 26.9 20.1 32.7 31.9Other .................................................. .0 .5 3.6 .0 6.0 .3 .0 .91Includes taxes on real estate, net worth, estates, inheritances, and gifts.Note: Detail by type may not add to 100 percent because of rounding.Source: Organization for Economic Cooperation and Development (OECD), Revenue Statistics.72 | Economic Report of the President