Cato Institute, The State of Taxes: How the Feds Fund (and Don’t Fund) Spending:

Authorities knowledge exhibits that the federal tax system is extremely progressive. The very best‐​revenue Individuals pay a disproportionate share of revenue taxes and face the best common tax charges throughout all federal taxes. …

The bottom‐​revenue half of Individuals paid a mean revenue tax price of three.1 %, whereas the highest 1 % of revenue earners paid a 26.0 % price. Throughout all taxpayers, the common revenue tax price was 13.6 %.

Excessive‐​revenue earners additionally pay a disproportionate share of the revenue taxes relative to revenue earned. Determine 1 exhibits that as a share of adjusted gross revenue (AGI), the highest half of revenue earners paid 97.7 % of federal revenue taxes. The highest 1 % earned 22.2 % of whole revenue and paid 42.3 % of all of the revenue taxes. The highest 10 % earned 49.5 % of the revenue and paid 73.7 % of the revenue tax.

The U.S. Treasury’s Workplace of Tax Evaluation additionally estimates that the whole federal tax system is extremely progressive, even after accounting for payroll, company, and different taxes. Determine 2 exhibits that common tax charges climb as incomes improve. The bottom 20 % of revenue earners, measured by adjusted household money revenue, face common tax charges which are both adverse or near zero. A adverse tax price implies that the taxpayer is a web beneficiary of the tax system, probably receiving refundable tax credit, such because the Earned Revenue Tax Credit score (EITC) and Little one Tax Credit score (CTC).

The highest 10 % of revenue earners pay a mean tax price of 26.7 %. Treasury additionally breaks the upper revenue earners into even narrower slices, displaying that as incomes rise, so do tax charges, even on the very prime of the revenue distribution. The very best incomes 0.1 %, pay an estimated common tax price of 32.4 %.

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