December 15, 2017

Who Pays the Income Tax? Part 1

For more, see Part 2 of this chart series.

In 2015 the top-earning 1 percent of Americans paid nearly two-fifths of federal personal income taxes. However, they earn just over one-fifth of all income. The top 5 percent of income earners paid 60 percent of all income taxes while earning 36 percent of all personal income.

The share of federal income taxes paid by the bottom 50 percent of earners is far lower than their share of all income.  The Americans in the lower half of the income spectrum earned 11 percent of all income but paid only 3 percent of the federal personal income tax revenue. Almost all federal personal income tax revenue is collected from one-half of taxpayers. As the chart below suggests, the wealthy disproportionately fund the US federal government through personal income taxes, clearly demonstrating the progressivity of the US federal tax code.

While the data from the IRS on what incomes constitute each bracket are not yet available for 2015, the table below provides this information for 2014. The data for 2014 regarding percentage of income tax paid and percentage of total income are nearly identical to 2015, and there is little reason to think the income thresholds dramatically changed from 2014 to 2015. (Between 2010 and 2014 all these thresholds did rise, but slowly.)