Among federal taxes, the highest earners pay the largest share by a wide margin: the top 1% of filers paid 40.4% of all federal individual income taxes in 2022, and the top 10% paid 72%. Who pays the most taxes by income level depends on which tax you look at, though. Income, capital gains, and estate taxes concentrate heavily at the top; payroll taxes fall proportionally harder on wage earners below the Social Security wage cap; and excise taxes take a bigger bite, as a share of income, from lower-income households.
Federal Income Tax Shares Across the Income Scale
Tax year 2022 data, the most recent available, shows how steeply federal income tax payments concentrate at the top:1Tax Foundation. Summary of the Latest Federal Income Tax Data, 2025 Update
- The top 1% (income above $663,164) paid 40.4% of all individual income taxes.
- The top 10% (income above $178,611) paid 72%.
- The top 25% paid 87.2%.
- The bottom 50% (income below roughly $46,000) paid about 3%.
The gap between income earned and taxes paid is what makes the system progressive on paper. The top 1% earned 22.4% of all adjusted gross income but paid 40.4% of the income taxes, nearly a two-to-one ratio. Individual income taxes remain the single largest source of federal revenue, so this distribution shapes the overall picture of who funds the federal government.
Why the Top Pays Such a Large Share
The federal income tax uses seven brackets running from 10% to 37%, and each rate applies only to the income within its tier. For a single filer in 2026, the 37% top rate begins above $640,600; for married couples filing jointly, it starts above $768,700.2Internal Revenue Service. IRS Releases Tax Inflation Adjustments for Tax Year 2026, Including Amendments From the One, Big, Beautiful Bill The One, Big, Beautiful Bill, signed on July 4, 2025, extended the rate structure set by the Tax Cuts and Jobs Act of 2017; without it, the top rate would have reverted to 39.6%.
Some high earners with heavy deductions also owe the Alternative Minimum Tax, a parallel calculation that limits certain deductions to ensure a minimum payment. The 2026 AMT exemption is $90,100 for single filers and $140,200 for joint filers, phasing out at $500,000 and $1,000,000 respectively.2Internal Revenue Service. IRS Releases Tax Inflation Adjustments for Tax Year 2026, Including Amendments From the One, Big, Beautiful Bill
Why the Bottom Half Pays So Little Income Tax
The small income tax share paid by the bottom 50% reflects both lower earnings and the way deductions and refundable credits work. The 2026 standard deduction is $16,100 for single filers and $32,200 for married couples filing jointly, wiping out taxable income for many lower-earning households before any bracket applies.2Internal Revenue Service. IRS Releases Tax Inflation Adjustments for Tax Year 2026, Including Amendments From the One, Big, Beautiful Bill
Refundable credits push the number lower still. The Earned Income Tax Credit reaches as high as $8,231 for a family with three or more qualifying children in 2026. The Child Tax Credit provides up to $2,200 per qualifying child, with a refundable portion of up to $1,700. When these credits exceed the tax owed, the IRS pays the difference as a refund, producing a negative effective income tax rate for many households at the bottom of the scale.
That doesn’t mean lower-income workers pay no federal tax at all. Payroll taxes come out of every paycheck from the first dollar, and that’s where the burden shifts.
Payroll Taxes Fall Hardest on Wage Earners
Payroll taxes fund Social Security and Medicare. You pay 6.2% for Social Security and 1.45% for Medicare, and your employer matches both, for a combined rate of 15.3%.3Office of the Law Revision Counsel. 26 USC Ch. 21 – Federal Insurance Contributions Act Self-employed workers pay both halves, though half is deductible when calculating adjusted gross income.4Internal Revenue Service. Topic No. 554, Self-Employment Tax
The Social Security portion applies only up to a wage base limit, set at $184,500 for 2026.5Social Security Administration. Contribution and Benefit Base A worker earning $60,000 pays Social Security tax on every dollar of pay; a worker earning $500,000 pays it on only the first $184,500. As a share of total wages, the tax falls hardest on lower and middle earners.
Medicare has no wage cap, and high earners face an added 0.9% Medicare surtax on wages above $200,000 for single filers or $250,000 for joint filers.6Internal Revenue Service. Topic No. 751, Social Security and Medicare Withholding Rates That’s a small offset to the regressive shape of the Social Security portion, but it doesn’t reverse it.
Capital Gains Taxes Are Paid Mostly by the Wealthy
Profits on investments held longer than a year are taxed at preferential long-term capital gains rates of 0%, 15%, or 20%, depending on taxable income.7Internal Revenue Service. Topic No. 409, Capital Gains and Losses For 2026, a single filer pays 0% on gains if taxable income is $49,450 or less, 15% between $49,451 and $545,500, and 20% above that; for joint filers, the 20% rate begins at $613,700.8Tax Foundation. 2026 Tax Brackets and Federal Income Tax Rates Short-term gains are taxed at ordinary rates up to 37%.
On top of those rates, high-income investors owe a 3.8% Net Investment Income Tax on interest, dividends, capital gains, rental income, and similar earnings once modified adjusted gross income passes $200,000 (single) or $250,000 (joint).9Internal Revenue Service. Topic No. 559, Net Investment Income Tax The top effective federal rate on long-term gains comes to 23.8%, still below the 37% ordinary top rate. Because financial assets are concentrated among high-income households, capital gains taxes are paid overwhelmingly by filers near the top.
Estate and Gift Taxes Reach Only the Largest Estates
The federal estate tax applies only when someone dies leaving assets above the basic exclusion amount. For 2026, the exemption is $15,000,000 per individual, up from $13,990,000 in 2025 under the One, Big, Beautiful Bill.10Internal Revenue Service. What’s New — Estate and Gift Tax Married couples can effectively double that to $30,000,000 through portability. The top rate on the portion above the exemption is 40%.11Office of the Law Revision Counsel. 26 USC 2001 – Imposition and Rate of Tax
The gift tax works alongside the estate tax to keep people from giving assets away tax-free during their lifetimes. In 2026 you can give up to $19,000 per recipient per year without touching your lifetime exemption or filing a gift tax return. Anything above that annual amount reduces the remaining lifetime exemption dollar for dollar.
One boundary worth noting: some states impose their own estate or inheritance taxes with exemptions as low as $1,000,000. A state-level tax can hit an estate that’s well below the federal threshold.
Excise Taxes Fall Harder on Lower Incomes
Federal excise taxes are built into the price of specific goods, chiefly motor fuel, airline tickets, tobacco, and alcohol. They generated roughly $90 billion in 2022, about 2% of federal tax revenue.12U.S. Treasury Fiscal Data. Government Revenue Because everyone pays the same amount per gallon of gas or pack of cigarettes regardless of income, these taxes take a larger percentage of a lower-income household’s earnings than a higher-income one’s. In terms of who pays most in absolute dollars, excise taxes are a small slice for every group; in terms of share of income, they lean regressive.
Corporate Taxes Are a Shrinking Slice
C-corporations pay a flat 21% federal tax on profits, set by the Tax Cuts and Jobs Act of 2017. Corporate income taxes make up roughly 6% to 10% of federal revenue in a typical year.13Tax Policy Center. What Are the Sources of Revenue for the Federal Government? In the early 1950s the share was closer to a third. Part of the decline comes from lower statutory rates and part from the shift toward pass-through structures like S-corporations, partnerships, and LLCs, whose profits appear on the owners’ individual returns instead of corporate ones. That shift moves more business income onto the individual income tax side of the ledger, where it lands, once again, mostly on high earners.