Final answer:
The money to pay taxes is sourced from the income of individuals and corporations, along with payroll, sales taxes, and customs. These tax revenues fund government services and programs across federal, state, and local levels. The IRS collects the taxes, and Congress appropriates the funds for the 'general welfare' of the country.
Step-by-step explanation:
The money used to pay taxes to appropriate government agencies is paid from the income individual citizens and corporations earn, as well as from other sources such as payroll taxes, sales taxes, and customs and tariffs. In the United States, the federal government collects the largest portion of tax revenue from individual income taxes, specifically $1.7 trillion, with an additional $1.2 trillion coming from payroll taxes. These funds are essential for financing a myriad of government services and programs, including but not limited to social security, healthcare programs like Medicare and Medicaid, defense and security, safety net programs, interest on federal debt, benefits for federal retirees and veterans, and infrastructure projects.
The federal tax dollars are managed in three main categories: mandatory spending, discretionary spending, and interest on debt. For instance, discretionary spending covers a range of government expenses such as military, transportation, veterans benefits, and education. State and local governments also collect taxes and may receive a portion of their funding from intergovernmental revenues shared by the federal government.
Revenues generated through taxes are managed by the Internal Revenue Service (IRS), and the appropriation of these funds is carried out by Congress, as mandated by the Constitution. The tax revenues are then used to provide for the 'general welfare' of the country, funding services and programs beneficial to all residents.