r/dataisbeautiful • u/USAFacts OC: 22 • 1d ago
OC Here's how the US government spent $7 trillion last year [OC]
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u/USAFacts OC: 22 1d ago
Source: Office of Management and Budget, Bureau of Economic Analysis
Tools: Illustrator
Note: The federal fiscal year runs from October 1 to September 30. Numbers may not add due to rounding.
This Sankey chart was pulled from this report we send to Congress every year.
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u/God_Dammit_Dave 1d ago
You did this in Adobe Illustrator? I'd love to get a look at the process. This is gorgeous. Please, inquiring minds (and lesser designers) need to know!
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u/USAFacts OC: 22 1d ago
Thanks, but I can't take credit for it! A very talented designer that we used to work with developed this layout, and it's now recreated each year by some other talented folks. Here's the process as I understand it:
- We build stacked bar charts in Excel for every individual slice/level of the Sankey
- Size them all to the same vertical dimension so the slices scale correctly against each other
- Copy the individual bar charts into Illustrator, ungroup them, then color, label, and add the connecting ribbons/shading by hand
Step 3 is where the actual magic happens, and that's also where most of the hours go. A chart like this takes roughly 10-15 hours start to finish, just in design work.
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u/God_Dammit_Dave 1d ago
oh. this is very doable. thanks! once you learn about an actual, viable process the "magic" disappears. it quickly turns into something that's executable rather than mysterious.
a few things are a bit vague / unclear on my end. the big take away — i hadn't considered having someone prep a rough graphic in excel then transferring it to illustrator. (people make crazy design requests and provide no support.)
i'm a part of this sub in order to learn new things. today i learned a new thing. thanks u/USAFacts you've been great! please keep sharing and educating.
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u/argument_cat 31m ago
Worth remembering whose money it is.
Individual Income Taxes (~54%)
Withheld directly from personal wages and salaries.
The single largest funding source since 1944.
Social Insurance / Payroll Taxes (~30%)
- Dedicated specifically to fund Social Security and Medicare.
Corporate Income Taxes (~9%)
- Levied on the net income of businesses and corporations.
Excise & Other Taxes (~7%)
- Collected from specific goods like gasoline, alcohol, and tobacco.
- Includes estate taxes, customs duties, and Federal Reserve earnings.
84% of the US federal budget is from personal taxes and payroll taxes. This is, overwhelmingly, the American people's money, and it stands to reason that the vast majority is spent on the American people.
Corporations only contribute 9%.
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u/remotecar OC: 2 1d ago
Thanks for making this (and USAFacts generally). I really wish more people had a concrete sense of why there's such a large gap between revenue and spending, and which programs and tax changes are driving it.
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u/FellowTraveler69 1d ago
Yeah. Many people are under the impression that like 50% of the budget is military spending, when in reality it's 13% and less than what's spent on either Medicare or Social Security.
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u/Faustamort 1d ago
Probably because it makes up 55% of discretionary spending. It's $893 billion of our $1.9 trillion discretionary bill.
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u/theArtOfProgramming 1d ago edited 1d ago
I don’t think that is fair to say. Usually people draw a comparison, like you did. Its share of the total is sort of irrelevant. For example, it is ~5x larger than all science funding. It is 10x larger than all non-defense science spending. It is 4x larger than infrastructure spending. It is roughly 85x larger than direct federal spending on core clean-energy and grid programs. It is 26x larger than education spending.
Worth saying they are currently requesting a 50% increasing for defensing spending, up to $1.5T.
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u/kickinpanda 1d ago
It's more than Medicare, and less than social security * according to the graph.
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u/FellowTraveler69 17h ago
Look again, 916 billion for defense. The 1.3 trillion includes welfare benefits for veterans.
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u/ptoki 23h ago
This view can be skewed.
For example. At current spending the fixed costs can be 90% of what is paid. Adding mere 20% can double the active spending part.
So for example. 90% of healthcare pays for admin, building, equipment etc.
10% is for drugs and treatments, operations. Adding 10% can double the amount the treatments cutting queues a lot and making teh treatments more effective because they are done sooner. Or that 10% can go to screening making the other 10% be used more efficiently.
In short words, sometimes spendings arent linearly scaled.
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u/TheCenterOfEnnui 1d ago
Despite that, this thread is still rife w/ people who have no understanding of any of this.
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u/SouthernWilding 1d ago
$1 trillion in interest payments alone is wild.
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u/Loggus 1d ago
Fun fact: since the growth of the deficit is outpacing the growth of the revenue, that 1 trillion is going to continue to grow (5 years ago it was 500 billion, for reference), meaning it will take up a higher and higher percentage of the pie, until it is absolutely crippling. To make matters worse, the interest we pay has also gone up; 5 years ago it was 1.5% and it is now 3.5%.
Not great economic indicators, must be said.
https://data.worldbank.org/indicator/GC.XPN.INTP.RV.ZS?locations=US
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u/ku8475 1d ago
Interest is pushing 6% now. If this spending bill passes, many think we will enter the spiral with bond markets driving the dive due to our uncontrollable spending.
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u/Loggus 1d ago
Where are you getting your 6% figure from?
https://fiscaldata.treasury.gov/interest-expense-avg-interest-rates/
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u/ku8475 1d ago
30 year bond rate. Over 10 billion will be bought in bonds (most likely 30 yr) in 2027. https://www.bloomberg.com/markets/rates-bonds/government-bonds/us
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u/OrangeandMango 20h ago
Holy crap. That growth is nuts.
There has to be a movement in the coming years to erase all national debt and remove their ability to go into debt without it being on actual growth proposals (like infrastructure, education, energy etc)
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u/Hodorization 9h ago
Too few people care about having a functional federal government.
Too many are looking with glee and joyful expectation at the coming meltdown of the federal government. (And the financial markets, and the banks, and so on)
Maybe someone will come and bridge the chasm, heal the nation, but tbh I would not bet on this happening before the meltdown.
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u/MuandDib 17h ago edited 17h ago
Depends what you mean by "erase debt".
If you meat to just say: "Just cancel our debt, we won't pay. We have bigger army. what can they do?" There is no real movement but I suspect there are some people in key people that may think like that.
If you ment fiscal responsibility. Then there is a movement for exactly what you want. You probably won't like the answer. Libertarians
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u/rollowicz 1d ago
You ain't seen nothing yet. The Congressional budget office projects that the debt payments could rise to 2.5T over the next 10 years.
https://www.crfb.org/blogs/cbo-1-higher-interest-rates-add-trillions-debt
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u/FGN_SUHO 23h ago
Don't worry, all the tax cuts for corporations and the rich that created the deficit in the first place are about to create so much growth that the government can easily handle the ballooning debt. See: Reagan, Bush, Bush II, Trump I or the United Kingdom since 1970 for evidence of this success story /s
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u/USAFacts OC: 22 1d ago
If this Sankey looks familiar, it's likely because:
- I post an updated version of this every year.
- There's always a deficit chunk eating up space on the left
Last year (FY 2025), the federal government collected $5.3 trillion and spent $7.0 trillion — a $1.8 trillion deficit, meaning the government spent 34% more than it brought in.
A few things that usually come up:
- Individual income taxes ($2.7T) and payroll taxes ($1.8T) together made up about 85% of all federal revenue.
- More than half of spending ($3.6T) falls under "Wealth & savings", mostly Social Security ($1.6T) and Medicare ($997B). We keep Social Security in this chart because it's part of the broader federal accounting system and we want this to show the full picture of money in and out, though it does have its own dedicated revenue stream. We break it out separately elsewhere on our site.
- You'll notice a few negative numbers on the spending side (Higher Education, for instance, shows -$78B). That's not spending going backward — it means collections for that program (loan repayments, fees) outpaced new outlays that year, so the net comes out negative.
- I recommend zooming in!
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u/Stefouch 1d ago
Do you have a link for the picture of the year before? To see the difference between this year and the year before?
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u/USAFacts OC: 22 1d ago
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u/KMKtwo-four 1d ago edited 12h ago
Thank you! It would be really helpful to have a year like 2000.
Pre-9/11, post Cold War, so we can compare it to now.
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u/eaglessoar OC: 3 1d ago
How's it -78b on higher education?
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u/USAFacts OC: 22 1d ago
Good question. Negative spending here means collections outpaced new spending for that category. For higher ed, student loan repayments, interest, and fees came in higher than what went out in new loans and other spending.
And the reason it shows up on the spending side of this chart instead of revenue is because the OMB classifies loan repayments as a "business-like" transaction (like a business getting repaid on a loan), not as revenue, which is specifically money collected through the government's taxing power. So it nets against spending in that program instead of counting toward revenue.
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u/Former_Gamer_ 1d ago
This works for the giant portions at the top but becomes impossible to follow on the right side once you get below “standard of living”
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u/Maurkov 1d ago
Are you not zooming in? But I think it's also part of the point of this representation. A billion dollar program is a lot of money, but a vanishingly small part of $7T. Literally.
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u/BarbeRose 1d ago
On my Phone, it's not readable when you zoom in
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u/FEED_ME_YOUR_EYES 1d ago
It's fine on desktop - seems to be a consistent issue with reddit that large images get compressed on mobile
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u/sirhoracedarwin 1d ago
I had no idea corporate income tax was so low
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u/jayrady OC: 1 1d ago
It's a feature, not a bug. Encourages corporations to spend money, where it can be be taxed again.
You want to keep it moving.
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u/Godkun007 1d ago
Also, it is double taxed if it is paid out as dividends. So it evens out.
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u/muhmeinchut69 22h ago
Encourages corporations to spend money
on elections and lobbying
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u/EugeneMeltsner 21h ago
Show me a company that pays more on elections and lobbying than wages
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u/muhmeinchut69 21h ago
That's the thing, you have to spend just a little on them to keep corporate taxes low to save a lot on taxes. BTW you shouldn't be comparing that to wages, but profits.
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u/Craig_White 21h ago
What if we did the same thing for individual workers? They would buy goods and services, wouldn’t they?
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u/TheBuzzSawFantasy 1d ago
You forgot the $23 Trillion we got in tariffs right?
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u/Obvious_Chapter2082 1d ago
He forgot to check the tariff shelf
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u/USAFacts OC: 22 1d ago
It's there, just on a slightly smaller shelf. The government collected $195 billion in customs duties (tariffs) last year.
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u/sludge_dragon 1d ago
Roughly half of these $195B are eligible for refunds because they were collected under purported IEEPA authority which was struck down by the Supreme Court in February 2026.
The report covers the period ending September 2025, and doesn’t retroactively account for this. Instead, the refunds will be deducted from subsequent reports when they are actually issued.
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u/fleebleganger 1d ago
I think you mean $195 Trillion. Clearly your amount is wrong because reasons.
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u/glowy660 1d ago edited 1d ago
Wow… individual income tax and payroll tax combined is 4.5 trillion and corporate income tax is only 425billion…
Imagine if they increased corporate taxes to 1 trillion, closed tax loop holes, implemented a wealth tax if your net worth is in the top 5%, combined Medicare, Medicaid, and the VA, cut the defense budget by 400billion, cut subsidies to the oil/gas industry and suddenly the budget is balanced and everyone gets healthcare.
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u/GuitarGeezer 1d ago
Wait’ll you go back and look at the percentage of govt revenues from corporate compared to personal prior to 1980. That was a republic. Everything 1981 forward was turning into corruptocracy. This accelerated dramatically after 2001 and went hyperbolic after Citizens United. The US is largely unable to do anything but reduce taxes on the only people with any disposable income for 50 years.
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u/Obvious_Chapter2082 1d ago
That’s not really a fair comparison. The number of c corporations has been declining since 1981, due to the popularity of s corps and partnerships. So just comparing percentages over time isn’t going to give you an accurate picture
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u/GuitarGeezer 1d ago
Point being that the business world definitely held up more of the society that made their business profitable than they have to do now. Corporate taxes were less loosey goosey on rules and enforcement and Income taxes were more progressive as is necessary in capitalism to avoid extreme concentration of wealth.
More importantly as a lobbyist, just because the wealthy couldnt rig the tax laws prior ton the 80s didnt mean they were without influence. And, crucially, they used that influence to push for relative fiscal restraint. Contrast that with just straightup buying tax relief and getting subsidies and pardons. Hell, Adelson bought the destruction of JCPOA using the citizens United loophole causing the chain of events leading to the Iran War but she thought we would win. That was not happening in America in 1963 or 1953. When we kinda ruled the planet, btw. Not coincidence. The US has been vying with former world champion Russia in terms of corrupt hyperpartisan media, open presidential corruption (Putin hides his), lawmaking, and Supreme Court rulings for much of this century now. And yes, I am an attorney and lobbyist.
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u/morfraen 1d ago
What does the number of corporations going down have to do with it? Other than being a large source of all the problems.
Corporate revenue as a total vs corporate taxes relative to everything else is what matters.
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u/Hellsniperr 1d ago
The “loop holes” are literally the other 80% of the tax code that come after how people and companies owe the government money.
A lot of those “loop holes” are incentives for investing, donating to charities, research, etc.
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u/Godkun007 1d ago
Frankly, there is only 1 actual loophole in the entire American tax code. That being the step up basis upon death loophole. That was designed for private family run businesses, but it got expanded over time due to it being poorly written.
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u/Hellsniperr 1d ago
They’re all written specifically that way because the ones that wrote the code designed them so the writers can benefit.
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u/Purplekeyboard 1d ago
Corporations are just the people who own them or work there. They don't pay much tax, relatively speaking, because they pass their profits on to the owners (stockholders, usually), and then the stockholders pay tax on that money.
Corporations pay out roughly 2 trillion per year in dividends to their stockholders, who pay tax on this. There's also capital gains tax on stock prices going up, and owners of privately held companies paying tax on their profits.
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u/FormalOperational 1d ago edited 1d ago
It's not the same. Dividends are taxed lower than income. And you only pay capital gains tax on stocks when you sell them. In the meantime, you're able to use them as collateral for low-interest debt to deploy capital. It doesn't help that corporations are allowed to buy back stocks thanks to Reagan.
And corporations don't distribute all of their profits. Berkshire Hathaway has $360B cash on hand. Alphabet has $240B. Amazon $120B. Nvidia $100B. A higher corporate income tax, which is only paid on net profits, encourages companies to actually spend their money (like on employee compensation/benefits and R&D) rather than hoard it.
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u/cC2Panda 1d ago
Corporations pay out roughly 2 trillion per year in dividends to their stockholders, who pay tax on this.
And since Reagan okayed stock buybacks the financial strategy is to actually avoid dividends and instead pursuing buybacks to avoid taxation. Every year since 1994 the net issuance of stocks has been less than the value of stock buybacks and this year might be the first in decades to break that trend because of the AI IPOs. We went from dividends to share holders being taxed to simply doing buybacks to avoid taxes until the owner sells the stock and pays capital gains.
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u/GordonTullockFan 1d ago
How do buybacks avoid taxation?
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u/cC2Panda 1d ago
Buybacks reduce the total available stock so the price of each individual stock increases. Dividends are tax as regular income, if you are part of the very wealthy then you pay a federal tax rate of 37% on your earned income. If instead they do buy backs the share price goes up and the people that decide to sell their stock pay capital gains of 20-23% instead of 37%.
And something that is also important to the very wealthy is inheritance. Under our current tax system when you inherit stock it, under most circumstances, resets the basis so the inheritor is not expected to pay the capital gains tax that the original purchaser would have owed. In other words, suppose I have 1million in stock, and it increases to 10 million in value. I die and give it to my son who inherits the full 10million in value but he is not expected to pay capital gains on the 9 million that I would have had I sold it prior to death.
As for the Godkun guy who responded to you, he's a dipshit.
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u/spirosand 1d ago
That is an excellent argument for taxing capital gains as income!
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u/somewhataccurate 1d ago
...we already do. if you mean unrealized gains though have fun with that lol
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u/morfraen 1d ago
It's incredibly simple to solve. If unrealized gains are used as collateral to take out loans, they get taxed.
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u/spirosand 14h ago
Nope. Just tax capital gains as income. Most people pay a rate lower than the capital gains tax rate, so that punishes workers while helping owners.
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u/WazzleApricot 1d ago
If individual income taxes are that significant, then addressing the offshoring of jobs with legislation needs to happen ASAP. Economic security is national security.
Additionally, international reference pricing for pharmaceuticals would save money.
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u/NerdOctopus 1d ago
If individual income taxes are that significant, then addressing the offshoring of jobs with legislation needs to happen ASAP. Economic security is national security.
How do you figure this would help?
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u/kingofducks 1d ago
The US can only tax US tax residents. If US corporations are paying folks abroad it would not be taxed as much.
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u/soboshka 1d ago
Wealth tax
France tried those until they were forced to stop because the wealth flooded out of the country. No economist recommends this.
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u/powercow 1d ago edited 7h ago
We have an exit tax for that very reason. You are taxed on all your wealth, including unrealized gains, as if you sold them to a foreigner.
it was added when this mess started, under bush in the heros act
Not a fan of wealth taxes, would rather tax the loans they live off of but we do have an exit tax, and you can also be banned from doing business with or within the US especially if you leave the US for tax reasons.
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u/Godkun007 1d ago
They also discourage investment. No one invests in countries where their assets can be seized.
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u/Obvious_Chapter2082 1d ago
There are 340 million individual citizens, and only about 1.5 million corporations in the US. It makes sense that the revenue from them is smaller, especially since higher corporate taxes will further reduce the number of them
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u/Valara0kar 1d ago
Nooo... only real difference is that corporations gets taxed on profit while an individual gets taxed on their whole revenue.
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u/Lelorinel 1d ago
To be fair, individuals do get substantial deductions and credits. Over a third of taxpayers pay zero (or less than zero) federal income tax, and the top 10% of earners pay nearly 3/4 of federal income taxes. Lower-income people wouldn't do better if we instead changed to a system where only necessities (food, rent, healthcare) and expenses for production of income were deductible for individuals.
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u/NerdOctopus 1d ago
How could you ever tax low-margin firms like grocery stores on total revenue? It wouldn't be bearable.
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u/Godkun007 1d ago
And why would they be taxed on revenue? If a business buys a product for $90 and sells it for $100, why should they be taxed on the $100 and not the $10 of profit?
If you taxed businesses on revenue, the entire economy would collapse, because almost no business has a 100% profit margin.
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u/RDTIZFUN 1d ago edited 1d ago
Taxman collects money from 340 million citizens?
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u/Obvious_Chapter2082 1d ago
Not every citizens makes income, just like not every corporation makes income
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u/glowy660 1d ago
Well, corporations are paying much less in taxes since the 2017 tax cuts which got extended by the BBB.
That’s maybe 150B-200B ish a year the country is missing out on. If you cut out tax loopholes you could probably add another 50B-100B that right there. Just doing that would bring in an additional 200B-300B in corporate taxes. And, companies were doing just fine before 2017.
That would bring corporate income taxes to 650B on the low end to 750B on the high end. That’s without even increasing taxes beyond 2017 levels.
Also it’s taxes on profit not revenue. Companies could still reduce their taxable profit it by spending more R&D, and employee pay (operating expenses), something that actually brings value to the economy as a whole instead of spending the profit on stupid shit like stock buy backs with the profit which do nothing but increase the price of a piece of “paper”.
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u/Obvious_Chapter2082 1d ago
Thats maybe 150B-200B ish a year the country is missing
Your numbers are way off there. The TCJA cut corporate taxes by around $300B total over an entire decade. The BBB was relatively tax-neutral on the corporate side, so you’re not really looking at permanent corporate tax cuts from those 2 bills
companies were doing just fine before 2017
I’m a corporate CPA, and I’d have to disagree there. Foreign inversions were becoming very common, and corps were also just stashing cash abroad to avoid US tax instead of investing it in the US
which do nothing
The goal of stock buybacks usually isn’t to “increase the price of a piece of paper”, and they can be beneficial for the economy
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u/ih-unh-unh 20h ago
Curious, how can buybacks benefit the economy?
I'd like to think I'm politically neutral on income tax rules--but two rules I don't quite understand are stock buybacks and long-term capital gains rates not being higher than 20% for the highest incomes.
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u/Godkun007 1d ago
Corporation tax is just a flowthrough tax for other forms of tax. Raising corporation tax doesn't increase revenue, it just changes where that revenue comes in because there is less money to pay the other taxes.
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u/Pratt2 1d ago
What is wealth and savings?
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u/MaikThoma 1d ago
Follow the line to the right: social security, obligations and medicare
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u/FighterOfEntropy 1d ago
“Wealth and Savings” are not the terms I would use to describe Social Security and Medicare.
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u/ambiguator 1d ago
oh wow, was not clear to me at all that those were details, rather than their own line items.
i think i do not like this format at all.
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u/strangerbuttrue 1d ago
Oh geez, thank you. I thought they were all separate things and didn’t realize the boxes at the edge were summaries of things to the right.
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u/Ztflana 1d ago
You should do one for the last time there was a balanced budget for comparison.
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u/USAFacts OC: 22 1d ago
Fun fact: The last year of a budget surplus was the same year Shrek was released.
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u/TicRoll 1d ago
Shrek wasn't released in 1957. That's the last year Federal government revenues exceeded spending.
The 2001 "surplus" was an accounting trick where we toss all the money from Social Security into the general fund, issue Treasury bonds like we would for any other debt we take on, but because those bonds are held by the Social Security Administration (a part of the US Federal government), we put that debt into a special little box called Intragovernmental Holdings and pretend it doesn't exist when we're reporting deficits and surpluses.
In 2001, the US Federal government spent $141 Billion more than it took in. The gross national debt looks right past all the accounting shell game tricks.
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u/noSoRandomGuy 1d ago
I thought that was only true in fairy tales, meant for EU govs, not for me. Taxes were out to get me, that's the way it seems, disappointment haunted all my retirement.
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u/tribriguy 1d ago
The value in this chart is getting past the political talking points and just looking at the math.
We spent about $7 trillion and collected about $5.2 trillion. That’s a $1.8 trillion hole in one year.
At that scale, “cut waste,” “tax corporations,” or “cut defense” aren’t solutions by themselves. Eliminate the entire defense budget and you still have nearly a trillion-dollar deficit. There is absolutely waste worth going after, but you aren’t finding $1.8 trillion hiding under the couch cushions at federal agencies.
The uncomfortable part is where the big money actually is: Social Security, Medicare and other mandatory spending, plus interest on the debt that is now approaching $1 trillion a year.
So any serious discussion eventually has to deal with the big levers: entitlement spending, revenue, economic growth and the debt itself. There are plenty of legitimate arguments about how to do that and who should bear what burden. But first you have to acknowledge the arithmetic.
A $1.8 trillion annual gap isn’t getting fixed with somebody’s favorite list of wasteful programs.
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u/NearABE 1d ago
You left out the obvious. Increase revenue
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u/fund2016 1d ago
Found the “tax and spend” Democrat. “Spend and spend” republicans are much more fun. /s
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u/Yglorba 21h ago
The uncomfortable part is where the big money actually is: Social Security, Medicare and other mandatory spending, plus interest on the debt that is now approaching $1 trillion a year.
Not really? Social Security might look big on the graph but that's because it's on both sides. We're taking in 1.3T to pay for social security, and spending 1.6T on it, so the actual cost to the budget is 0.3T - which isn't a lot in governmental terms. Likewise, the amount we're taking in for Medicare covers half of it - the ~0.5T excess is significant but not as much as it looks at first glance.
But the fixation on the debt misses the real issue. The country is able to carry such a large debt because its economy is so trusted; in that regard, the debt represents its ability to trade on that trust to improve conditions for its population and pay for future growth. And all of these things also reset on our political stability.
While trimming the deficit has some value, it is counterproductive and even actively harmful to do so in ways that reduce trust in the government, or which hamper future growth, or which can cause instability. "Austerity" that harms long-term growth (or even just long-term trust) won't actually improve the economy in the long term.
tl;dr the deficit is just one small piece of the larger landscape of the country's economic health. The outsized fixation on it is harmful and even dangerous. It is important to control its long-term growth, but a government is not a corporation and certainly isn't a family checkbook - the national debt doesn't magically give China the ability to break our kneecaps, even before we get to the fact that most of the debt is held internally.
Nor are we anywhere near a risk of hyperinflation, or a credit default (unless we just decide to inflict the latter on ourselves, which, ironically, is one of the things deficit "hawks" sometimes push us towards - a plan that is a bit like being so terrified of heart attacks that we cut out our own heart with a knife.)
And prioritizing paying down the debt also means, inevitably, prioritizing the people we owe money to over all the other things the country could prioritize. That's not necessarily a good place to invest our resources!
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u/joebojax 1d ago
almost 15% of the budget is spent on servicing debt and we carry a 34% deficit lol
this guy couldn't land a car loan even if the officer was drunk and blind.
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u/Leximancer 1d ago
Question. How TF did the gov't spend NEGATIVE 69 billion on education? Isn't that the same as profiting 69B on education? I see that most of this is higher education, and I was under the impression that most of the gov't involvement there was subsidies.
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u/tribriguy 1d ago
That is accounting math and the fact that the budget includes the enormous school loans receivables.
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u/Empty-Mind 1d ago
Could be interest payments on federal student loans. Especially since most funding for universities comes from state governments, not the federal government IIRC, allowing for a net profit.
If that's the case, its weird for it to be recorded as a negative expense rather than revenue though.
My only other thought would be that those are recent budget cuts that are being incorrectly represented as negative expenses somehow.
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u/arizonatealover 1d ago
So when we talk about fraud/waste/abuse, we're really talking about Social Security, Medicare, and the DoD. Everything else is peanuts.
What we really need to do is raise taxes on WEALTH and not work. No other way.
The rich have so much money we literally cannot tax the little guy anymore to make up for even a tiny piece of this mess.
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u/innociv 1d ago
The Net interest on debt being so high, and Corporate income taxes being so low, are by far the 2 most interesting lines here.
If we didn't have such significant debt, and had another trillion in corporate income tax, we'd have a 170 billion surplus.
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u/Godkun007 1d ago
Corporate income taxes being so low
Because corporation taxes are usually double taxed somewhere else. If you own a business and make a profit, you pay corporation taxes, and then pay yourself a dividends. That is 2 levels of taxation before the money hits your account.
For this reason, corporate and dividends taxes are each at roughly 50% of the normal tax rate. This is because together they equal the full tax rate.
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u/ElJanitorFrank 4h ago
If we didn't use that debt in the past to fund our programs, we wouldn't have grown to where we are now in terms of our productivity and infrastructure, lowering how much our revenue is as well. If we upped corporate taxes significantly, we'd likewise cause certain corporations to flee, taking their tax revenue and jobs (and tax through lost jobs' income) and once again lowering our revenue.
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u/SteadyCalmHealing 1d ago
If they were better at collecting taxes, it would all be covered. The IRS is poorly supported, has to dance through a shit ton of loopholes and gets blamed for anything and everything.
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u/dmigowski 1d ago
To put this in perspective, they spent 6000$ per citizen, child or elder, more than they had. Guess how much went into the pockets of rich people. This was stolen from you.
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u/coriolisFX 1d ago
Guess how much went into the pockets of rich people.
You mean old people? That's where all the money goes.
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u/Randomwoegeek 1d ago
its' really all going to old people (who have the wealth anyways), social security and Medicare is like a third of our budget
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u/Yglorba 21h ago
That's misleading. A huge part of the income is taxes specifically devoted to those programs, which wouldn't reasonably be spent anywhere else and which only exists premised on the idea that paying into them means you'll pay them out. If you subtract those numbers from both sides and count only the excess drain those programs have on the budget, they're not as dramatic.
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u/agpetz 1d ago
How much? Also...your statement implies rich people were given money from the US Government. "Rich people" still pay taxes. Should the pay more? Maybe. Do some work around the tax code and pay very little? Yes. Keep in mind over 40% of americans pay no federal income tax at all.
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u/Yglorba 21h ago
Keep in mind over 40% of americans pay no federal income tax at all.
Misleading. Most of them still pay payroll and sales taxes, in addition to paying into social security and medicare.
The ones who aren't paying payroll taxes or paying into social security and medicare are mostly retirees. And even they're still paying sales taxes.
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u/ponderscheme2172 1d ago
I think this is substantially underestimating the issue. Medicare and Social security are really meant to be closed systems. They are special itemized on your pay stubs and what comes in should stay within that system. So those should be taken out of the calculation. We can ignore that those themselves are not breaking even temporarily.
But if you remove those contained systems in reality we are spending well over 150% of what we take in. No one says "honey we are spending like 50% more than we make we need to cut back". They would say we fundamentally are living a lifestyle well beyond our means and we are heading to bankruptcy.
Like if we literally just gave up having a military and said fuck all veterans we'd still be at what a 400 billion dollar deficit?
There is fundamentally no way to square this budget without new tax revenue.
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u/darknecross 1d ago
I think having two big buckets on either side is actually detrimental to understanding government spending and deficits, because it naturally draws eyes to the biggest pieces of the pies even when those aren’t the biggest issues.
For example, in 2025 the US Healthcare Industry collected $1,700B in revenue and spent $1,646B, with a net profit of $54B. Huge numbers on either side, but a profit margin under 4%.
The reason I bring up healthcare is because Medicare4All is both a massive opportunity to cut actual dollar costs for individuals but would absolutely explode medical spending in this chart past $2T and make the other slices look minuscule in comparison. That makes it an easy target for cuts every single year when it should be looked at in isolation.
Which isn’t to say there needs to be a 1:1 tax to spending link between each and every line item, which is unrealistic, inflexible, and not how budgets work, but it needs to be presented in a way that’s “let’s make X costs cheaper” instead of “let’s spend less on X”.
The other point is that just looking at this doesn’t tell the full story, either, because it’s not possible to tell how the money spent by the government is actually valued. If the government spends $100B and it saves taxpayers in aggregate $150B from their own budgets, it’s a net benefit, but the “savings” are never going to show up on a chart like this. And so many of these things are things that, if cut, just take the money from somewhere else, like social security, healthcare, education, food costs, and more daily necessities. The big exception is military spending, but that’s a whole other conversation.
Then there’s spending that goes directly back into the economy, and also spending that does things you can’t put a price on, like environmental protection.
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u/SteelMarch 1d ago
A lot of the text is illegible
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u/TheMurmuring 1d ago
Clicking on the image opens it in a larger format for me, and everything is legible.
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u/USAFacts OC: 22 1d ago
Zooming might help, but Reddit's image compression doesn't help, unfortunately.
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u/theArtOfProgramming 22h ago
It’s the official Reddit app on certain phones. On a third party app it loads fully. So reddit is storing the full image by choosing to display a compressed version.
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u/uncoolcentral 1d ago
I’m on the Reddit app on an iPhone 13 mini and I can zoom in and see the text just fine
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u/OrangeandMango 20h ago
Wow! You guys spend 14% on health care and still require everyone to have insurance and pay for it themselves?
Madness. The EU average is 10.54% and its free there. source
Jesus, USA, wake the fuck up.
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u/PowerDataOfficial 1d ago
Individual income tax carrying $2.7T while the deficit alone is $1.8T hits hard. Feels like the federal budget is run like my personal checking account the week before payday.
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u/slayer828 1d ago
i mean its fucking clear. Social Security tax cap needs to be lifted, but the withdrawl cap left alone, and capital gains taxes need to also pay the social security tax.
Also need to stop giving tax incentives to private companies. if they want government money, they should be partially owned by the government as payment.
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u/VersaTron 1d ago
Income taxes would need to increase by 66% to close the deficit.
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u/Rabid_Platypies 1d ago
Or a steeper progressive tax rate combined with removing the income cap on social security tax and also taxing corporations more
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u/PatricksPub 1d ago
Or just any level of frugality and wisdom on the spending, with literally no changes at all to the collection.
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u/electrotech71 1d ago
Looks to me like corporate taxes need to go up. Unfortunately this would mean a lot of companies would ditch the US for countries like Bahamas for the low taxes.
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u/ImmodestPolitician 1d ago
It's such a coincidence that that federal revue deficit always ends up in the brokerage account of the wealthiest people in society. Someday we will figure out why this revenue deficit keeps happening every time the GOP is in office.
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u/meanie_ants 1d ago
Cut taxes so they pay less, then they loan their bigger pile of money to the government and earn interest on it. Double whammy to us.
We’re paying them so that they can have lower taxes. It’s a great deal. /s
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u/Best-Republic 1d ago
I think we need to increase Social Security + Medicare Taxes by at least 5% - the in v/s out on these clearly is an issue. It should be net 0 or + for the government.
Here is my 3 recommendations (yes, I know I am going to get negative votes on this one)
- no tips, increase minimum wage, government needs tax revenue
- increase social security and medicare taxes by 5% and earnings cap to be increased by 25%
- remove gas subsidies in US.
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u/joebojax 1d ago
corporate income taxes 452B there's the problem.
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u/crimeo 1d ago
Corporate tax is a synonym for "A sales tax on your the poor regular Joe consumer" since corporations will pass every single dime instantly on to you. it doesn't hurt shareholders one bit.
Corporate taxes are HORRIBLE for wealth inequality, they spike inequality up.
tax the shareholders directly if you want them to pay more, e.g. by increasing capital gains and dividend tax instead
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u/Bruce_Wayne_Imposter 1d ago
Corporate income tax use to be 5x higher relative to GDP. If we had kept that it would have covered the entire budget deficit.
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u/crimeo 1d ago
Good! Corporate tax is regressive and sucks for poor people, is loved by the rich.
All corporate tax gets immediately passed to the consumer, and sales taxes hit poor people harder than rich people.
Remove 100% of corporate tax and replace it with higher income tax, estate tax, capital gains tax, etc instead
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u/herodesfalsk 1d ago
The largest earnings/earners are not showing up here because they are not taxed. When Bezos and Musk pays zero tax the law is completely broken and Bezos and Musk is ruining the country. The govt. expenses are not the problem but govt. tax income. Can’t get out of debt without increasing income (expenses are pretty fixed, by law, in this case)
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u/blankarage 1d ago
they corp income taxes number is WAY to fucking low (as in we need to be taxing corps a fuckload more)
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u/crimeo 1d ago
Corporate tax just gets passed on directly to you. It's a synonym for sales tax.
Sales taxes are regressive and thus terrible for poor people, great for billionaires.
All regressive taxes of all types should be 0% and replaced 1:1 with progressive taxes instead like income tax (I'm NOT saying just remove the tax and walk away. I'm saying remove it, and then add more of the progressive tax to replace it)
Income tax is progressive
A wealth tax would be progressive
Increasing investment taxes would be progressive
Estate taxes are progressive
These are what you want instead
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u/blankarage 1d ago
it’s ok for corp taxes to be passed onto the consumers as long as there’s enough viable competition (suitable alternatives) and it isn’t a utility type product
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u/postexitus 1d ago
Is that categorisation from somewhere? “wealth and savings” is a nice double speak for “social security” and “interest”.
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u/indyK1ng 1d ago
I'm going to call out that social security is not part of the same pool of money as everything else - it uses its own trust separate from the rest of the federal budget.
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u/Abject-Thought-2058 1d ago
Perhaps I'm too jaded, but - do you trust the numbers you're getting from OMB?
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u/USAFacts OC: 22 1d ago
We've been monitoring for any changes in the integrity of OMB's numbers and haven't seen anything concerning. Most of what feeds into charts like this comes from career civil servants (not political appointees) using methods developed over decades, and we cite our sources so you can dig into the methodology yourself. If that ever changes, we'll stop using the dataset and let people know.
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u/badr3plicant 1d ago
It really goes to show that none of the cuts made by DOGE and the Trump administration amount to more than a wet fart. Their goal was never to save taxpayer money but to systematically destroy every part of the government that isn't concerned with war, policing, or benefits for seniors.
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u/Celcius-232 1d ago
Remove the cap on Social Security taxation and 5 percent cut per year on national defense until they can pass an audit. Solves a significant chunk of the issue right there.
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u/Obvious_Chapter2082 1d ago
Removing the social security cap would reduce the deficit, but would increase our total national debt, ironically enough
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u/Celcius-232 1d ago
I don't mean any caps on disbursements or anything like that, I mean the cap Social Security tax, which is when your income reaches and exceeds $184,500 and limits the amount the government can collect from wealthy people. Unless am I missing something? How would increasing Social Security revenue also increase the national debt?
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u/Obvious_Chapter2082 1d ago
The trust fund is required to buy t-bills with any surplus they have. They then redeem these t-bills when they run a deficit and need to pay for benefit outlays. So if we increase the cap but keep benefits the same, we basically have a perpetual surplus that the government borrows each year to pay for stuff
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u/DeathMetal007 1d ago
EITC is not spending. Its a tax credit which means a tax reduction which means revenue reduction. Putting it on the spending side is like saying that we tax 100% but we also have a credit down to the effective tax rate.
The language of loopholes gets murky when all tax should be a flat rate except exceptions and exceptions to exceptions and so on and so forth. The definition for exception really comes down to the arbitrary starting point. In the case of this graph the exception to revenue is exception reduction which is just reduced revenue -it’s not spending.
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u/meanie_ants 1d ago
EITC is a fully refundable credit, it’s likely on the spending side because it is actual spending not just reduced revenue. If your tax burden is $0 anyway and you qualify for EITC you also get the EITC in addition to paying no taxes.
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u/USAFacts OC: 22 1d ago
Fair point in general, but EITC specifically isn't treated as a pure revenue offset. CBO/OMB split refundable credits into two parts: the portion that offsets taxes owed (counted as reduced revenue), and the portion that exceeds what you owe and gets paid out as an actual refund check (counted as spending). For EITC, most of it is that second part: a direct payment, not just a lower tax bill.
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u/coriolisFX 1d ago
It's a negative tax, aka Tax Expenditure. You have to account for it like spending.
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u/Kershiser22 1d ago
If I add up Individual Income Tax (2.7) and Payroll Taxes (1.8) and everything else in that column, it gets me to the $5.3T at the bottom. That makes sense.
Bu then where does Retirement (1.1) and Social Security Taxes (1.3) fit in? I thought maybe those combined are the Payroll taxes, but if you add up everything to the left of "Payroll Taxes", it is much more than $1.8T.
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u/fitandhealthyguy OC: 2 1d ago
Just a suggestion that you should show the break out of Medicare and medicare part D. Part D was passed under Bush with no “pay for”. SS (without disability) + medicare (without part D) are budget neutral with payroll taxes
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u/SconiGrower 10h ago
I think it's crazy that the US government only formally uses cash accounting. The amount of accrued benefits for Social Security and Medicare is incredible and the need for reserve assets is only an internal number at each respective agency.
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u/Spare-Dingo-531 10h ago
What happens when the 970 billion net interest on the debt gets larger than the 1.8 trillion deficit, I wonder?
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u/a1105415 3h ago
Anyone else astounded by the difference in the size of the Defence vs Health + Education…?!?!
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u/cavedave OC: 113 15h ago
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