The government provides public goods and services for the community as
a whole. The government also regulates business activities and redistributes
income. In order to pay its bills, the government needs revenue, or
a source of income. The money that the federal government uses to
pay its bills comes mostly from various taxes. The pie charts in the activity show the revenues and expenditures for the federal government in 2012.
The first pie chart, titled "Income," illustrates where the
federal government receives its money. Social Security, Medicare,
unemployment, and other retirement taxes represent 24% of the government
dollar received. Corporate income taxes represent 7% of the government
dollar received. Excise, customs, estate, gift, and miscellaneous
taxes represent 7% of the government dollar received. Borrowing represents
30% of the government dollar received. Personal income taxes represent
32% of the government dollar received.
The second pie chart, titled "Outlays," illustrates the services
provided by the federal government. Social Security, Medicare and
other retirement represents 38% of the government dollar spent. Net
interest on the debt represents 6% of the government dollar spent. National
defense, veterans, and foreign affairs represents 24% of the government
dollar spent. Social programs represents 21% of the government
dollar spent. Physical, human, and community development represents 9% of the government dollar
spent. Law enforcement and general government represents 2% of the government dollar spent.