How much do the richest 1% in the United States pay in taxes per year?

Tax season is drawing to a close, and to avoid any fees or penalties, a tax return must be submitted to the IRS by Monday, 15 April (or April 17 in Maine and Massachusetts). While an extension can be requested to file the return until October 15, it does not apply to paying taxes, which must be done by the tax deadline. According to a January AP-NORC poll, only 27 percent of taxpayers believe their federal income taxes are fair, while 60% believe their tax burden is too high.

The tax burden of the top 1%

The tax system in the United States is designed to be progressive, which means that taxpayers with lower income levels pay a smaller percentage of their income in federal taxes than those with higher incomes. However, suppose we consider state and local sales taxes, which are applied at the same rate to all consumers regardless of income. In that case, low-income individuals pay a larger proportion of their earnings in sales taxes compared to their higher-income counterparts.

According to a recent analysis by the Tax Foundation, based on IRS data from 2021 (the most recent data available), the average taxpayer paid $14,279 in federal income taxes, which translates to an average tax rate of 14.9 percent. The analysis also found that the bottom 50 percent of taxpayers paid an average of $667, the top 50 percent paid an average of $27,891, and the top 25 percent paid an average of $50,963. Additionally, the top 10 percent paid an average of $108,251, the top 5 percent paid an average of $187,468, and the top 1 percent paid an average of $653,730. Regarding all federal income tax paid, the top 50 percent of earners paid 97.7 percent.

How much taxes do I have to pay to the IRS?

Each year, the IRS sets tax rates, the percentages of taxes paid based on taxpayers’ taxable income. Taxable income is defined as any income that is subject to federal taxes, whether earned or not. The corresponding tax rate depends on your marital status. For the tax year 2023, this is what must be paid in taxes: