Taxation in the United States is progressive,[283][284] and is levied at the federal, state, and local government levels. This includes taxes on income, payroll, property, sales, imports, estates, and gifts, as well as various fees. Taxation in the United States is based on citizenship, not residency.[285] Both non-resident citizens and Green Card holders living abroad are taxed on their income irrespective of where they live or where their income is earned. The United States is one of the few countries in the world to do so.[286]
In 2010, taxes collected by federal, state and municipal governments amounted to 24.8% of GDP.[287] For 2018, the effective tax rate for the wealthiest 400 households was 23%, compared to 24.2% for the bottom half of U.S. households.[288]
During fiscal year 2012, the federal government spent $3.54 trillion on a budget or cash basis. Major categories of fiscal year 2012 spending included: Medicare & Medicaid (23%), Social Security (22%), Defense Department (19%), non-defense discretionary (17%), other mandatory (13%) and interest (6%).[289]
In 2018, the United States had the largest external debt in the world.[290] As a percentage of GDP, it had the 34th largest government debt in the world in 2017; however, more recent estimates vary.[291] The total national debt of the United States was $23.201 trillion, or 107% of GDP, in the fourth quarter of 2019.[292] By 2012, total federal debt had surpassed 100% of U.S. GDP.[293] The U.S. has a credit rating of AA+ from Standard & Poor's, AAA from Fitch, and AAA from Moody's.[294]