In the United States, high-income households pay most of the federal income tax. The top 10 percent of filers cover roughly 72 percent of all federal individual income taxes, and the top 1 percent alone pays about 40 percent, while the bottom half of filers accounts for around 3 percent. That is the answer to who pays most of the taxes in the US by income level, at least when the question is about federal income tax. Once payroll taxes, investment income rules, and state and local taxes enter the picture, the distribution looks less lopsided.
Share of Federal Income Tax by Income Group
The most recent IRS data covers tax year 2022. Filers in the top 1 percent, with adjusted gross income above $663,164, paid 40.4 percent of all federal individual income taxes. Their average income tax rate was 26.1 percent, roughly seven times the rate paid by the bottom half of filers.1Tax Foundation. Summary of the Latest Federal Income Tax Data, 2025 Update
The top 10 percent starts at about $178,611 in adjusted gross income and pays 72 percent of total income taxes. The top half of all filers covers 97 percent of the bill. The bottom 50 percent, everyone earning below roughly $50,339, is responsible for the remaining 3 percent.1Tax Foundation. Summary of the Latest Federal Income Tax Data, 2025 Update
Those figures cover federal individual income taxes only. They do not include payroll taxes, excise taxes, or anything paid to states and localities, all of which fall more evenly (or in some cases more heavily) on lower- and middle-income households.
Why High Earners Pay So Much: The Bracket Structure
Federal income tax uses seven marginal rates from 10 to 37 percent. Marginal means each rate applies only to income within its bracket. Crossing into the 24 percent bracket does not mean 24 percent applies to your whole income, only to dollars above the threshold.
For 2026, single filer brackets run:2Internal Revenue Service. IRS Releases Tax Inflation Adjustments for Tax Year 2026, Including Amendments From the One, Big, Beautiful Bill
- 10% up to $12,400
- 12% from $12,401 to $50,400
- 22% from $50,401 to $105,700
- 24% from $105,701 to $201,775
- 32% from $201,776 to $256,225
- 35% from $256,226 to $640,600
- 37% over $640,600
For married couples filing jointly, the 37 percent rate begins above $768,700. The 2026 standard deduction is $16,100 for single filers and $32,200 for joint filers, which pushes a large share of income out of taxable territory before the brackets even apply. A single filer earning $50,000 begins the tax calculation at $33,900 after the standard deduction, keeping them inside the 12 percent bracket.2Internal Revenue Service. IRS Releases Tax Inflation Adjustments for Tax Year 2026, Including Amendments From the One, Big, Beautiful Bill
These rates were originally set by the Tax Cuts and Jobs Act of 2017, which lowered the top rate from 39.6 to 37 percent. They were scheduled to expire after 2025, but the One Big Beautiful Bill, signed into law on July 4, 2025, made them permanent along with the higher standard deduction.
Why the Bottom Half Pays So Little: Refundable Credits
Low rates on early brackets do not fully explain why the bottom 50 percent owes only 3 percent of income taxes. Refundable credits can erase a tax bill entirely and generate a payment from the IRS on top of that. The two largest are the Earned Income Tax Credit and the Child Tax Credit.
The EITC targets low- and moderate-income workers and can be worth several thousand dollars depending on income and family size. Because it is refundable, eligible filers who owe no income tax still receive the credit as a direct payment.3Internal Revenue Service. Earned Income Tax Credit (EITC) The Child Tax Credit works the same way for households with qualifying children. Together, these credits give millions of households a negative effective income tax rate: they receive more from the IRS than they pay in.
That does not mean those households pay no federal taxes at all. Payroll taxes come out of every paycheck, and excise taxes on fuel and other goods are built into prices regardless of income.
Payroll Taxes Change the Distribution
Payroll taxes fund Social Security and Medicare, and they follow rules that shift the relative burden down the income ladder compared to the income tax. The combined FICA rate is 15.3 percent: 12.4 percent for Social Security and 2.9 percent for Medicare, split evenly between employee and employer.4Internal Revenue Service. Topic No. 751, Social Security and Medicare Withholding Rates
The decisive detail is the Social Security wage base cap. In 2026, only the first $184,500 of earnings is subject to the Social Security portion.4Internal Revenue Service. Topic No. 751, Social Security and Medicare Withholding Rates Every dollar above that is exempt. Someone earning $184,500 and someone earning $2 million both pay the same flat Social Security tax on the employee side, roughly $11,439. As a share of total earnings, the $2 million earner pays a fraction of what a middle-income worker pays.
Medicare has no cap, so all earned income is subject to the 2.9 percent combined rate, and single filers above $200,000 owe an additional 0.9 percent Medicare surtax.4Internal Revenue Service. Topic No. 751, Social Security and Medicare Withholding Rates Even so, for many workers earning under six figures, payroll taxes take a bigger bite out of a paycheck than income taxes do. That is why the concentrated income-tax numbers at the top understate what middle-income households actually pay to the federal government overall.
Why the Very Wealthy Can Pay a Lower Effective Rate
Share of taxes paid and effective tax rate are two different questions. High earners pay a large share of income taxes in dollar terms, but the wealthiest Americans often face a lower effective federal rate than a top-bracket wage earner because a large portion of their income comes from investments, not salaries.
Long-term capital gains, profits on assets held more than a year, are taxed at preferential rates. For 2026:5Tax Foundation. 2026 Tax Brackets and Federal Income Tax Rates
- 0% on taxable income up to $49,450 (single) or $98,900 (married filing jointly)
- 15% up to $545,500 (single) or $613,700 (married filing jointly)
- 20% above those thresholds
High earners may also owe the 3.8 percent Net Investment Income Tax on the lesser of net investment income or the amount by which modified adjusted gross income exceeds $200,000 (single) or $250,000 (married filing jointly).6Internal Revenue Service. Topic No. 559, Net Investment Income Tax Even including that surtax, the maximum combined federal rate on long-term gains is 23.8 percent, well below the 37 percent top rate on wages.
Someone earning $2 million primarily from capital gains faces a meaningfully lower federal rate than someone earning $2 million in salary. This is the single biggest reason a person in the top 1 percent can pay a smaller share of their income in federal tax than a doctor or executive whose income is mostly W-2 wages.
State and Local Taxes Flatten the Curve Further
Federal taxes get the most attention, but state and local taxes reshape the picture again. Top state income tax rates range from zero in about eight states to over 13 percent in the highest. Combined state and local sales tax rates average around 7.5 percent nationwide, and some areas exceed 10 percent.
State and local taxes tend to be less progressive than the federal system, and many pieces of it are regressive. Sales taxes take a larger share of income from lower earners, who spend most of what they make on taxable goods. Property taxes, though levied on wealth, often hit middle-income homeowners harder as a share of income than the very wealthy. Combine every layer, and the gap between what high earners and low earners pay as a share of income is narrower than the federal income tax numbers alone would suggest. The federal income tax is the most progressive piece of a system that, on the whole, tilts less sharply toward the top than the 40-percent-from-the-1-percent figure implies.
The Short Version by Income Level
If you want a quick read on who bears what:
- The top 1 percent (above $663,164 AGI) pays about 40 percent of federal income taxes at an average rate of 26.1 percent, but effective rates fall for those whose income is mostly capital gains.
- The top 10 percent (above $178,611 AGI) pays about 72 percent of federal income taxes.
- The top half of filers (above about $50,339 AGI) pays 97 percent.
- The bottom 50 percent pays about 3 percent of federal income taxes, and refundable credits leave many with a negative effective income tax rate, though they still pay payroll and excise taxes.
- Middle-income workers often pay more in payroll taxes than in income taxes, and the Social Security wage base cap means that share drops sharply for very high earners.
The headline numbers are accurate: high earners pay most of the federal income tax. The full answer is that “most of the taxes” depends heavily on which tax you mean.