Revenue from tariffs goes to the US Treasury’s general fund

Individual income taxes are the federal government's primary revenue source, see a tracker that breaks down where the rest of the budget comes from

The US government historically makes nearly half of its total revenue last year from individual income taxes. But the US makes also makes money from a variety of other sources, including Medicare taxes and corporate income taxes. However, the federal government has run a deficit since 2001—reaching a peak of $3.13T in 2020.

What are tariffs and how do they work?

Tariffs are taxes on imported goods paid by importing companies but typically passed on to consumers. They vary by country and product and, despite recent spikes, have historically accounted for less than 2% of federal revenue. Explore more with these data visualizations from USAFacts.

Tariffs are typically paid by the importing company or organization to the US treasury

Tariffs levied on foreign countries are typically paid by the importer upon arrival of goods—for example, if Walmart imported a $100 pair of shoes, they would pay the US treasury an additional $15 under a 15% tariff rate. The degree to which these costs are passed onto consumers depends on real-world business agreements.

Tariffs once fueled the US economy

US tariffs peaked in 1930 with the Smoot-Hawley Tariff Act, which slashed global trade by 65%. Once a key revenue source, tariffs gave way to income taxes in 1913, leading to decades of lower trade barriers. Today, US tariffs remain among the lowest worldwide.

US Tariff revenue rose to $264B in 2025—More than double that of recent years

In April 2025, President Donald Trump announced tariffs on countries across the globe, raising them to unprecedented levels in modern American history. The increase in tariff rates led to a significant rise in tariff revenue.

Use this calculator to find out what your federal income taxes pay for

In the fiscal year 2024, the US federal government's biggest spending priorities included $1.5T on Social Security, $877B on national defense, and $874B on Medicare. This calculator from the Microsoft AI for Good Lab can help you estimate how your tax dollars are allocated across $6.8T in federal spending.

How income taxes evolved from a funding tool for war into a crucial revenue source for the federal government

Americans have long resisted income taxes. So, how did they become permanent? This overview explains how wartime funding needs, constitutional changes, and economic shifts gave rise to the modern tax system, from the Civil War to the payroll withholding rules we follow today.

Pros and cons of tariffs

While some mainstream economists are skeptical about tariffs, President Donald Trump is bullish on them. The pros and cons of tariffs include their ability to help governments raise money and the potential for retaliatory tariffs.

Calculate how much of your tax dollars go to each federal program based on your income, filing status, and number of children

Read an overview of US tariff policy before the second Trump Administration

This comprehensive report from the Congressional Research Service explores the evolving role of tariffs—from a major source of government revenue to a tool for trade and foreign policy—providing insights into current practices, legal foundations, and global trade dynamics.

The federal deficit is the gap between what the US spends and what it collects

This US Treasury page explains how the federal deficit occurs when annual spending exceeds revenue, shows the current fiscal-year shortfall, and tracks how deficits rise and fall with economic conditions and policy choices.

Federal spending falls into 2 categories: mandatory and discretionary

Federal spending is split between mandatory programs, funded automatically by law, and discretionary programs, funded through annual appropriations. This video breaks down which major programs fall into each category and why the distinction matters.

The 16th Amendment paved the way for capital gains taxes

Ratified in 1913, the 16th Amendment paved the way for a far-reaching federal income tax and supercharged the country’s coffers. Before then, the US depended on import tariffs and so-called consumption taxes to raise revenue.

The US has carried debt since 1791

After the Revolutionary War, the US owed $75M to nations like France. Debt builds when spending exceeds revenue, funding programs, wars, and economic recovery efforts. Most debt is domestic, like Social Security bonds, with foreign nations also holding a share.

Treasury bonds, notes, and bills are critical vehicles for the federal government to raise money for public expenses and manage the national debt

For investors, they're all usually considered low-risk options since they’re backed by the federal government.

The Tariff Act of 1789 was one of America's first acts

One of the first acts ever passed by the United States Congress instituted tariffs on foreign goods. The bill was sponsored by then-Congressman James Madison and signed into law by President George Washington. The goods the first Congress felt necessary to tax included Jamaican rum, playing cards, and—of course—British tea.

In 2021, Social Security began drawing down trust fund reserves to help pay for benefits

The Social Security trust funds are invested solely in US Treasury bonds. Any Social Security tax revenue surplus has historically been invested in these bonds, which are non-marketable securities available only to trust funds. The interest on these investments also contributes to program income.

The Constitution gives Congress sweeping control over the federal budget

Article I, Section 8's Spending Clause authorizes Congress to tax, pay debts, and promote the "common Defence and general Welfare," making it one of Congress's most powerful tools—and the constitutional foundation of federal budget control.

Trade and tariffs in the Roman world

Trade between nations and empires date back thousands of years, including the use of tariffs to raise government revenue.

The Federal Transit Administration distributes roughly $20B annually to support local transportation

Created by the Urban Mass Transportation Act in 1964, the FTA funds and oversees the roughly 2,200 transit systems that receive federal support across the US, covering everything from subway capital investment to rural bus service.

The de minimis exemption was a US tariff loophole

Until Aug. 29, 2025, US consumers could purchase up to $800 of goods per day, directly from an overseas company without incurring any tariffs on the products.

Most Americans take the standard tax deduction

A tax deductible is an expense that a taxpayer or business can subtract from adjusted gross income, reducing their taxable income and therefore reducing the amount of taxes owed. Governments often use tax deductibles as a way to reward people who do things that are considered beneficial to society, like charitable donations.

The USPS spent $3.97B in 2024, accounting for .058% of the federal budget.

Private K-12 schools rely on tuition; colleges rely on funding for research

Tuition, endowments, donors, and grants often fund private schools, allowing them to eschew national curriculum standards. Private colleges and universities also charge tuition, but often rely on federal funding for research.

ETFs and mutual funds are both taxed on capital gains and on dividends

Many experts consider ETFs to be more tax-efficient—ETFs are less likely to trigger capital gains taxes that must be passed on to the fund holder.

Roughly 39% of Visa's revenue comes from data processing fees.

Visa gets roughly 0.13% to 0.14% of each transaction. About 32% of its revenue stems from the money banks pay Visa to use its services, and roughly 26% of its revenue comes from international transaction fees.

The USPS spent $3.97B in 2024, accounting for .058% of the federal budget.

The price of gas is a composite made up of several different factors, with the federal gas tax making up less than 20% of what drivers pay at the pump.

The US dollar is the most widely circulated currency in the world, and is involved in nearly 90% of global transactions

US consumers collectively owe more than $1T to credit card companies—almost as much as they owe in auto loans.

Hedge funds, the private investment firms that trade a wide swath of financial assets, make money by imposing steep fees on investors and from the fund's investment performance.

While the first exchange-traded fund (a 'basket' of different assets that can be bought and sold on a stock exchange) in the US only launched in 1993, the global ETF market has grown to more than $10T in the short time since.

Art theft is the third-largest source of criminal revenues worldwide, thanks in part to the subjective nature of valuing a work of art.

Mark Twain spent decades feuding with the US Postal Service, convinced its costs and regulations were bureaucratic overreach.

The American Society of Civil Engineers' infrastructure report card gave the US a C in 2025, its highest grade since the project launched in 1998.

Despite being favored by 87% of Americans, Congress does not have term limits.

The rivalry between Alexander Hamilton and Thomas Jefferson centered on federalism—the question of how much power the federal government should hold relative to the states.

Experimental hantavirus vaccines and therapies, still under development, have long been funded by the US military.

Before the current East Wing ballroom project, only two White House renovations in the past 100 years cost more than $10M.

See a ranking of the best (and worst) Federal Reserve Chairs since 1914 out of the 16 men and women who have held the office since.

Up to a million Girl Scouts sell about 200 million cookie boxes every spring, generating $800 million, largely because refusing a child is frowned upon

Jimmy Carter signed a 1978 bill that legalized home brewing, a move credited with kick-starting the craft beer industry.

Tattoos remain visible on your skin thanks to immune cells called macrophages

Some renewable energy sources may weaken the resiliency of electric grids by removing outage buffers provided by coal- and natural gas-fired plants, which provide the system with more time to find a new power source if a plant goes down.

How Amazon operates a 'flywheel' business model, a self-reinforcing cycle that drives continuous growth

Stanford built a Google Maps for the Roman Empire, revealing how much it cost to travel in the ancient world

See how fireworks are made and learn how metals like magnesium and copper are responsible for different colors.

Iran's Revolutionary Guard Corps is independent of Iran's regular army and is one of the most powerful and influential military-political organizations in the Middle East.

The word 'jazz' evolved from 'jasm,' 19th-century American slang for 'energy'

A 2019 Facebook event called on attendees to "Storm Area 51, They Can't Stop All of Us," resulting in countless memes, the creation of a music festival, and eventually the arrests of those who did try to approach the area.