The federal dollar end to end: two taxes carry it in, a quarter is borrowed

Key takeaways

Two taxes carry the federal budget: individual income taxes ($2,744 billion) and payroll taxes ($1,703 billion) supplied 83 percent of calendar 2025's $5,368 billion in receipts.
One dollar in four was borrowed: spending reached $7,199 billion, and the $1,831 billion gap between taxes and outlays is the Borrowing flow on the chart, 25.4 percent of everything spent.
Net interest ($999 billion) now out-flows national defense ($922 billion); it first passed defense in 2024. Customs duties more than tripled in a year, $79 billion in 2024 to $264 billion in 2025.

What's happening

The chart draws the entire federal budget as flows for calendar 2025: eight revenue streams and borrowing enter on the left, the budget passes them through the middle, and eighteen spending functions exit on the right, every ribbon sized by its Monthly Treasury Statement total. The picture a sankey adds over any bar chart is proportion at a glance: the two thick ribbons entering (individual income taxes and payroll taxes) visibly dwarf everything else on the left, and the borrowing ribbon runs thicker than any single tax except those two.

On the way out, the top three ribbons are checks and interest, not operations: Social Security ($1,609 billion), Medicare ($1,018 billion), and net interest ($999 billion) leave the budget before a dollar reaches defense, health programs, or veterans.

$1 in $4

The borrowed share of calendar 2025 federal spending: $1,831 billion of $7,199 billion, entering the chart as the Borrowing ribbon alongside eight streams of taxes.

Who fills the budget, and who does not

Households fund the federal government twice: once through income taxes and again through payroll taxes, together $4,447 billion. Corporations contributed $424 billion, less than a sixth of what individuals paid through income taxes alone. The remaining streams are small: customs duties at $264 billion, excise taxes at $102 billion, and three categories under $60 billion each. When receipts fall $1,831 billion short, the difference arrives as borrowing, which is why the chart balances only with that ninth ribbon.

The exits tell the same concentration story: the three social insurance functions (Social Security, Medicare, and the Health function, which is mostly Medicaid) absorb $3,621 billion, half of all spending. Everything the word "government" usually evokes, defense, courts, transportation, agriculture, science, diplomacy, shares what remains.

Two ribbons that changed size

Net interest passed national defense in 2024 ($908 billion against $898 billion on calendar-year sums) and widened the gap in 2025. It is the one major flow with no program behind it: the money services debt issued for past spending, much of it refinanced from the low-rate 2010s at today's rates. And customs duties, flat around $80 to $98 billion for years, jumped to $264 billion in 2025 under the new tariff regime, moving from the budget's smallest major stream to its fourth largest.

What to watch

Whether net interest crosses Medicare, with $19 billion between them in 2025 and rates still repricing old debt upward. Whether customs holds its new size: the first six months of 2026 sum to $73 billion, below 2025's pace. And the borrowing ribbon itself, which the monthly deficit calendar tracks month by month; where the money lands is the subject of the agency-level view.

Common questions

Where does the US government get its money?

Calendar 2025: individual income taxes $2,744 billion, payroll taxes $1,703 billion, corporate income taxes $424 billion, customs duties $264 billion, excise taxes $102 billion, plus three smaller categories. Borrowing covered a further $1,831 billion.

How much of federal spending is borrowed?

25.4 percent in calendar 2025: $1,831 billion of $7,199 billion in outlays had no tax receipts behind it.

Does the government spend more on interest than defense?

Yes, since 2024. In calendar 2025 net interest was $999 billion against $922 billion for national defense.

Why calendar year instead of fiscal year?

The chart sums January through December for a familiar frame; the government's own fiscal year runs October through September. Both come from the same Monthly Treasury Statement lines, and the monthly download supports either cut.

Data: federal receipts by source, outlays by function, and the monthly deficit (US Treasury, Monthly Treasury Statement, summed over calendar 2025), from the Kitegraph library. Borrowing equals outlays minus receipts by construction. Functions are net of offsetting receipts; Commerce and Housing Credit netted to minus $31 billion in 2025 and therefore cannot appear as a flow. Payroll taxes are the MTS "Employment and General Retirement" category.