Which of the following provides the greatest source of revenue for the federal government?

Question

Quizplus · Accepted Answer

Income taxes provide the greatest source of revenue for the federal government. In the fiscal year 2020, individual income taxes accounted for approximately 50% of the federal government's revenue. This revenue is generated through the progressive tax system where individuals with higher incomes pay a higher percentage of their income in taxes. Regressive taxes, such as sales taxes, tend to have a greater impact on low-income individuals as they pay a higher percentage of their income in taxes compared to individuals with higher incomes. Medicaid taxes are a form of payroll tax that provides funding for the Medicaid program and Social Security taxes provide funding for the Social Security program, but neither of these sources generate as much revenue for the federal government as income taxes.

Which of the Following Provides the Greatest Source of Revenue