Individual taxes are the largest source of revenues for the federal government, representing more than half of all revenues collected. They include taxes levied on wages and salaries, income from investments, and other income.
The individual tax code is progressive, meaning that those with higher incomes pay a greater share of their earnings in taxes. At the same time, high earners benefit disproportionately more from tax expenditures, also known as “tax breaks,” than lower earners.
Many economists agree that simplifying the tax code could have fiscal and economic benefits. Tax reform done right would promote economic growth, make our fiscal outlook more sustainable, reduce the complexity and burden of compliance, and increase the system’s transparency and fairness by treating individuals and businesses in similar circumstances more equally.
Below is a selection of key charts on individual income taxes in the United States and how they fit within the federal budget.
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Further Reading
What Are Estate and Gift Taxes and How Do They Work?
Estate and gift taxes produce relatively lower revenue compared to other sources, but they generate a significant amount of attention, and even controversy.
10 of the Largest Tax Breaks Explained
Tax breaks totaled over $2.0 trillion in 2025. That’s more than the government spends on Social Security, defense, or Medicare and Medicaid.
8 Key Charts on Tax Breaks
The cost of tax breaks was greater than the size of the deficit in 2025.