Well, the main things interest groups do to get laws passed in their favor are the fatal flaws of the Articles of Confederation wasthat the central government couldn’t levy and collect taxes. Itcouldn’t perform as a true central government because it hadno firm source of revenue.To support the government, citizenspay taxes. The Constitution gave the House of Representativesthe main power for levying federal taxes. State governmentlegislatures have the main responsibility for establishing statetax laws. Localities may also impose county or city taxes.Where Does the Money Come From?The government receives revenue from a variety of sources.To better understand where the government gets its money,studyFigure 11, which shows the approximate percentages ofrevenue for the year 2013. Most revenues received at the fed-eral level come from direct taxes. In fact, over 80 percent ofthe money that goes to the federal government comes fromtwo sources: personal income taxes and payroll taxes. If youexamine your pay stub, you’ll see that a certain amount ofmoney has been withheld. Two taxes withheld are the federaltax and FICA. FICAstands for Federal Insurance ContributionsAct. These taxes are used to fund Social Security and Medicare.Your FICA and federal income taxes together take by far thebiggest bite from your paycheck. In addition, however, you mayhave deductions for state taxes, local taxes, and unemploy-ment compensation.The next largest source of revenue for the federal governmentis corporate taxes. Businesses pay taxes based on their esti-mated earnings. They do so by paying quarterly taxes basedon that estimate. At the end of the year, they must pay moretaxes if their income exceeds the estimate. Otherwise theymay get a refund.In this instance, revenuerefers to the income a govern-ment receives, forexample, from taxes,for public use.
