Final answer:
option b,The largest component of total income in the US is compensation of employees, which includes all forms of wages and benefits. Corporate income taxes, while a source of federal revenue, have decreased as a percentage of GDP over the years.
Step-by-step explanation:
The student asked what the largest component of total income in the US is. The correct answer is: c. compensation of employees. This encompasses the wages, salaries, and benefits that workers receive in exchange for their labor.
Although corporate income tax, referred to commonly as corporate profits, is a source of federal tax revenue, it is not the largest component of total income. In fact, as the provided information indicates, corporate income tax has declined over time, from about 4% of GDP in the 1960s, to 1-2% of GDP in more recent years.
Instead, individual income taxes and payroll taxes make up a significant portion of federal revenue, indicating the prominence of employee compensation in the income makeup.