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What is the taxes paid breakdown by class
Executive Summary
Federal income taxes are highly concentrated among high earners: the top 1% paid about 40% of federal individual income taxes in 2022, and the top 10% paid roughly 72–76% depending on the dataset, while the bottom half of earners paid only 2–3% of income taxes. State and local taxes tell a different story: most state and local systems are regressive, imposing higher effective rates on lower-income households, so total tax incidence across levels of government is less progressive than federal-only figures imply [1] [2] [3] [4].
1. What all the numbers claim — the headline: top earners shoulder most federal income tax
Analyses converge on a clear headline: high-income taxpayers bear a disproportionate share of federal individual income tax revenue. Multiple summaries present the top 1% contributing roughly 40–40.4% of federal income taxes in 2022, with the top 10% accounting for between 72% and 76% of income-tax collections. Reported totals for federal income tax revenue cluster near $2.14 trillion for 2022, and the top brackets’ shares map to high average statutory and effective rates—around 26% for the top 1% in the datasets cited. These figures show a strongly progressive federal income tax structure on revenue shares, and the data are consistent across independent summaries [2] [4] [5].
2. Beyond shares: average tax rates and what taxpayers actually pay
The datasets show two complementary metrics: the share of total tax revenue and average effective tax rates by bracket. The top 1% display average effective income-tax rates around 26.1%, while the bottom half face rates near 3.7%, with many in the lowest deciles showing near-zero or negative federal tax rates once refundable credits and transfers are included. Average-dollar figures for the top 1% indicate very large sums per return (reported averages exceeding $560,000 per return in one breakdown). These patterns underline that both the share and the effective rate rise steeply with income, explaining why a small group of high earners account for outsized dollar totals [2] [4] [6].
3. Top 5% and top 10% variations — how different reports frame concentration
Different summaries emphasize slightly different cutoffs. One dataset aggregates the top 5% and top 10% to show the top 5% paying about 61% of income taxes and the top 10% paying 72%, while another frames deciles and finer brackets where the top 1% alone provides about 40%. These variations reflect different grouping choices and underlying IRS tabulations, but they all point to the same conclusion: tax collection is heavily weighted toward the highest earners. Framing choices can influence perceptions—reports emphasizing the top 1% highlight extreme concentration, while broader top-10% metrics emphasize that a larger segment of high earners also shoulders most revenue [7] [1] [2].
4. State and local taxes flip the script: regressivity at subnational level
Federal figures alone overstate progressivity if one ignores state and local taxation. Comprehensive analyses show state and local tax systems tend to be regressive, with the lowest-income 20% facing effective state and local tax rates roughly 60% higher than the top 1%. Average effective state/local rates cited are about 11.4% for the lowest-income quintile versus 7.2% for the top 1%, meaning that when combined with federal taxes the overall system is less progressive than federal-only metrics imply. Policymakers and analysts must combine levels of taxation to assess true incidence across income classes [3].
5. The bottom matters: negative rates and transfers change the picture
Several analyses highlight that many low-income households report negative or near-zero federal tax rates because refundable tax credits and transfer programs exceed income tax liabilities. This results in the bottom decile effectively receiving net government support rather than paying income tax, explaining why the bottom 50% account for only 2–3% of income-tax revenue. These outcomes underscore that revenue shares are driven by both tax structure and transfer policy, and that income-tax burdens do not capture the full net fiscal position of households [6] [5].
6. What’s missing, where data disagree, and policy implications
The analyses are consistent on concentration but differ in presentation and some magnitudes depending on grouping and whether the focus is federal-only or includes state/local taxes. Important omissions include capital gains timing effects, tax avoidance strategies, and the interaction of transfers and payroll taxes, which can change incidence estimates. Reports framed to emphasize progressivity may underplay regressive state taxes; those emphasizing regressivity may underplay federal concentration. Readers should treat headline shares as accurate for federal income tax receipts while recognizing overall tax incidence requires combining federal, state, payroll, and transfer effects to understand who ultimately pays or benefits [1] [3] [4].