How much income tax does the top 1% pay
Executive summary
The answer depends on what "pay" means: measured as a share of total income-tax revenue, the richest 1 percent account for roughly a quarter to over a third of income-tax receipts in common analyses; measured as an individual effective tax rate, most top‑1% households pay a wide, overlapping range roughly from the mid‑teens up toward the statutory top rate (with many paying well below it) [1] [2] [3].
1. What the question can mean — share of revenue versus individual rate
When reporters say "the top 1% pay X percent of income tax," they usually mean the fraction of total income‑tax revenues contributed by that group, not the percent of their own income they pay, and sources disagree on that revenue share: the Peter G. Peterson Foundation reports the top 1% paid about 25% of all federal taxes in 2019 (a commonly cited historical snapshot) while private analyses of more recent IRS data used by SmartAsset and Visual Capitalist state the top 1% pay about 37% of total income taxes in the period analyzed [1] [2] [4].
2. Individual effective tax rates are a different story and highly variable
Looking at how much an individual in the top 1% actually pays as a share of their own income — the effective tax rate — produces a wide distribution: Yale’s Budget Lab shows 80% of top‑end filers face effective income‑tax rates between roughly 16% and 37%, reflecting large variation driven by income composition, deductions, credits and state differences [3]. That range matters because statutory marginal rates (10%–37% for ordinary income in 2026) only apply to slices of income; effective rates are lower once deductions, tax‑preferred retirement contributions, capital gains treatment and other provisions are counted [5] [6].
3. Why different studies produce different headline numbers
Different methodologies explain the gap between "25%" and "37%" headlines: some analyses use older IRS or Treasury data and count all federal taxes (including payroll and corporate components), while others examine only federal individual income‑tax receipts and use more recent years or state‑level aggregates; SmartAsset’s 37% figure and Visual Capitalist’s visualization rely on IRS data slices and analytic choices that yield a larger revenue share from the top 1% than the Peterson Foundation’s 2019 snapshot does [2] [4] [1]. In short, the headline depends on the data year, whether the metric is income tax only or all federal taxes, and adjustments for capital gains timing and tax expenditures [1] [3].
4. Composition of top‑1% income skews measured rates
A key driver of lower effective rates for some top earners is income composition: the top 1% derive a large share of income from investment sources such as capital gains and qualified dividends, which are taxed differently (and sometimes at lower rates) than wage income; PGPF notes the top 1% get a disproportionate share of investment income, with implications for how much they pay relative to wages [1]. Moreover, state differences matter: SmartAsset’s state breakdown finds the top 1% pay a larger share of state income taxes in some states (e.g., Connecticut) than in others (e.g., Wyoming), so geographic location and state tax codes shift the lived tax burden as well [2] [4].
5. Politics, policy and the recent tax law context
Recent federal law changes and inflation indexing also affect both the headline shares and individual rates: the OBBB-related inflation adjustments and permanent provisions of the earlier TCJA keep the seven‑bracket ordinary income structure (10%–37%) while changing thresholds and standard deductions for 2026, and policy changes projected by analysts (ITEP, Budget Lab) mean the top 1% will see different net effects depending on which credits are cut or retained — and which provisions expire or are made permanent [7] [8] [9] [3]. Analysts disagree about whether recent tax changes mostly shifted burdens upward or downward for the very rich, which fuels competing headlines about how much the top 1% "pay."
6. Bottom line: two succinct numbers, with caution
If asking “what share of income‑tax revenue comes from the top 1%,” credible analyses put the figure in the ballpark of roughly 25% (older federal snapshots) to about 37% (more recent IRS‑based analyses), depending on year and method; if asking “what percent of their own income do top‑1% households pay?” typical estimates place most filers between about 16% and 37% effective federal income‑tax rates, with substantial variation around those medians driven by income type, deductions, credits and state differences [1] [2] [4] [3]. Where the record is thin: exact, up‑to‑date percentages depend on the particular dataset and year chosen; the sources cited show why a single definitive number does not exist without specifying the metric and time frame [1] [2] [3].