Free IRS Data: Who Pays Income Taxes in USA

As we hear lots of information tossed around about taxes these days, we thought as a public service, we would share the actual IRS data about who pays what taxes in the USA. We are not taking sides but want everyone to understand the facts from IRS data so you can make your own conclusions.  Everyone hates taxes.  And everyone wants someone else to pay all the taxes.  Also, we have a massive budget deficit right now, and most reasonable people agree that the only way to balance the budget will be to cut spending growth and pay more taxes.  And no one likes the sound of more taxes.  But who pays those taxes, anyway?     First, you can see that our federal  tax revenues are growing but our spending is really high.  Federal spending (red line) far exceeds growing tax revenues (blue line).



According to the Office of Tax Analysis in the US Treasury Department (who advises and assists the Assistant Secretary (Tax Policy) and her deputies in the development, analysis, and implementation of tax policies and programs) , the U.S. individual income tax is “highly progressive,” with a small group of higher-income taxpayers paying most of the individual income taxes each year.

  • The top 25% of income-earners, who make more than ~$60,000 per year, make two-thirds of the national income and pay 87% of the income tax.
  • The top 10% of earners, who bring home a minimum of ~$110,000 per year, make 43% of the income and pay 70% of the income tax.
  • The top 5% of earners, who make a minimum of $150,000 a year, make a third of the income and pay almost 60% of the income tax.
  • And the top 1%, who all make more than $350,000 a year, make about ~17% of the income and pay 37% of the tax.
  • The bottom 50% collectively make about 13% of the income but only pay 2% of the taxes.


What about tax rates for each of these income levels?  Everyone seems to focus on tax rates rather than actual cash taxes paid to the government…What are the tax rates for each level of income?


average US tax rates by income band

Here is a chart that let’s us see who pays what taxes.

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