Where Will Federal Tax Revenue Come from in 2014?

October 25, 2013

When politicians talk about overhauling the nation’s tax code, they are typically only talking about reforming the corporate and individual income tax systems. Combined, these two sources comprise about 58 percent of all federal revenue in any given year. But it should be noted that the category of “individual income taxes” is comprised not only of collections from wages and salaries, but also includes revenues collected from taxes on other sources such as savings, capital gains, dividends, rents, and business income (including sole proprietors, S corporations, LLCs, and partnerships).

Social insurance taxes are dedicated to funding Social Security and Medicare programs and are generally considered outside the scope of most tax reform proposals.

For more charts like the one below, see the second edition of our chart book, Putting a Face on America’s Tax Returns.

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A tax is a mandatory payment or charge collected by local, state, and national governments from individuals or businesses to cover the costs of general government services, goods, and activities.

An S corporation is a business entity which elects to pass business income and losses through to its shareholders. The shareholders are then responsible for paying individual income taxes on this income. Unlike subchapter C corporations, an S corporation (S corp) is not subject to the corporate income tax (CIT).