USA Income Statement = -19% Average Net Margin Over 30 Years… USA Income Statement F1987 F1992 F1997 F2002 F2007 F2012 F2017 Comments Revenue ($B) $854 $1,091 $1,579 $1,853 $2,568 $2,449 $3,316 +5% Y/Y average over 25 years Y/Y Growth 11% 3% 9% -7% 7% 6% 2% Individual Income Taxes* $393 $476 $737 $858 $1,163 $1,132 $1,587 Largest Driver of Revenue % of Revenue 46% 44% 47% 46% 45% 46% 48% Social Insurance Taxes $303 $414 $539 $701 $870 $845 $1,162 Social Security & Medicare Payroll Tax % of Revenue 36% 38% 34% 38% 34% 35% 35% Corporate Income Taxes* $84 $100 $182 $148 $370 $242 $297 Fluctuates with Economic Conditions % of Revenue 10% 9% 12% 8% 14% 10% 9% Other $74 $101 $120 $146 $165 $229 $270 Estate & Gift Taxes / Duties / Fees / etc. % of Revenue 9% 9% 8% 8% 6% 9% 8% Expense ($B) $1,004 $1,382 $1,601 $2,011 $2,729 $3,537 $3,982 Y/Y Growth 1% 4% 3% 8% 3% -2% 3% Entitlement / Mandatory $421 $648 $810 $1,106 $1,450 $2,030 $2,519 Risen Owing to Rising Healthcare Costs + % of Expense 42% 47% 51% 55% 53% 57% 63% Aging Population Non-Defense Discretionary $162 $231 $275 $385 $494 $616 $610 Education / Law Enforcement / % of Expense 16% 17% 17% 19% 18% 17% 15% Transportation / Government Administration… Defense $283 $303 $272 $349 $548 $671 $590 2007 increase driven by War on Terror % of Expense 28% 22% 17% 17% 20% 19% 15% Net Interest on Public Debt $139 $199 $244 $171 $237 $220 $263 Has Benefitted from Declining Interest % of Expense 14% 14% 15% 9% 9% 6% 7% Rates Since Early 1980s Surplus / Deficit ($B) -$150 -$290 -$22 -$158 -$161 -$1,088 -$666 -19% Average Net Margin, 1987-2017 Net Margin (%) -18% -27% -1% -9% -6% -44% -20% Source: Congressional Budget Office, White House Office of Management and Budget. *Individual & corporate income taxes include capital gains taxes. Note: USA federal fiscal year ends in September. Non-defense 279 discretionary includes federal spending on education, infrastructure, law enforcement, judiciary functions.