How Much Do Americans Pay in Income Taxes?

By on December 3, 2012 in Current Events with 37 Comments

A recent report by the Tax Foundation found that the average federal tax rate for all taxpayers in 2010 rose slightly over the previous year.

The new analysis is based on new individual income tax data from the Internal Revenue Service covering calendar year 2010.

Taxes have been a prominent issue recently with debates in Congress over what to do about the “fiscal cliff” in 2013, so the Tax Foundation’s analysis of the new data is timely. Republicans have argued against raising taxes while Democrats say that taxes should be increased on high income earners.

According to the study, the average federal tax rate for all taxpayers rose slightly to 11.81 percent, up from 11.06 percent in 2009, and the average tax rates increased in 2010 for all except the top 1 percent, who saw a slight decrease from 24.05 percent of income in 2009 to 23.39 percent in 2010. This is about 10 times the tax rate of the bottom 50 percent of filers.

Average tax returns in 2010 break down as follows:

Summary of Federal Income Tax Data, 2010
Number of Returns* AGI ($ millions) Income Taxes Paid ($ millions) Group’s Share of Total AGI Group’s Share of Income Taxes Income Split Point Average Tax Rate
All Taxpayers 135,033,492 $8,039,779 $949,144 100.0% 100.0% 11.81%
Top 1% 1,350,335 $1,517,146 $354,810 18.9% 37.4% $369,691 23.39%
1-5% 5,401,340 $1,199,053 $205,839 14.9% 21.7% 17.17%
Top 5% 6,751,675 $2,716,199 $560,649 33.8% 59.1% $161,579 20.64%
5-10% 6,751,674 $915,165 $109,670 11.4% 11.6% 11.98%
Top 10% 13,503,349 $3,631,364 $670,319 45.2% 70.6% $116,623 18.46%
10-25% 20,255,024 $1,799,588 $156,477 22.4% 16.5% 8.70%
Top 25% 33,758,373 $5,430,952 $826,796 67.6% 87.1% $69,126 15.22%
25-50% 33,758,373 $1,664,728 $99,986 20.7% 10.5% 6.01%
Top 50% 67,516,746 $7,095,680 $926,782 88.3% 97.6% $34,338 13.06%
Bottom 50% 67,516,746 $944,099 $22,363 11.7% 2.4% <$34,338 2.37%
Source: Internal Revenue Service
*Does not include dependent filers.

Tax rates for all filers have dropped since 2001, but have done so the most for low-income households. The bottom 50 percent of filers paid 4.92 percent of their income in 2001, more than twice the rate they paid in 2010. In contrast, the top 1 percent of filers paid 27.6 percent of their income in 2001, which is about 4 points higher than their 2010 rate.

“Incomes have stagnated for low-income households in recent years, but this is true for high-income households as well,” said Tax Foundation chief economist William McBride. “In inflation-adjusted terms, the income thresholds for all groups – including the top 50 percent, the top 1 percent, and the top 0.1 percent – are lower than they were in 2001.”

The full report provides more in depth analysis and numerous tables displaying different data sets dating as far back as 1980 in some cases.

© 2016 Ian Smith. All rights reserved. This article may not be reproduced without express written consent from Ian Smith.

About the Author

Ian Smith is one of the co-founders of FedSmith.com. He enjoys writing about current topics that affect the federal workforce. Ian also has a background in web development and does the technical work for the FedSmith.com web site and its sibling sites.

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  1. PA says:

    SAD THE TWO PARTIES REFUSE TO WORK TOGETHER!

  2. PA says:

      Like many Americans, I believe that it is critical we restore
    fiscal responsibility to Washington and rein in our nation’s unsustainable
    deficits and spending. I also believe that our tax system is in need of serious
    reform and simplification. If done properly, it could help grow the economy,
    encourage job creation and investment here at home, and create a tax code that
    is fairer for all Americans and businesses.

  3. Aanimaldoc says:

    From the comments I am reading it appears socialism is now acceptable and applauded in the US.  Dividing the country by inciting class warfare has worked and is giving the government unlimited spending power with an attitude of “sticking it ” to the wealthy. For a short term this will seem attractive, but when the resulting inflation starts to hit, it will affect the middle class the most ( a multi-millionaire will not be adversely affected by the price of food or gas doubling – it is a small part of their family budget) As the wealthy start to cut back ( a lot of their fixed expenses will stay the same even though they now have less income) by using less services and less luxury purchases the result will be less jobs available . (less luxury jet worker jobs, car worker jobs, gardeners, cleaning services jobs, etc..). The socialist/marxist experiment did not work in the USSR and will not work in the US, it will just take a long time to bankrupt us severely . If government spending actually puts money back in the economy as Robert  suggests, then big government and more of it would cause the country to become wealthier. History and common economic sense prove otherwise. 

    • grannybunny says:

      I hardly think that billionaires will be cutting back on any expenses as a result of a modest increase in their tax rates.

      • FEDup says:

        You mean all 403 in the United States? What’s your definition of modest (my guess is in the range of 75% of net worth)

        • grannybunny says:

          The proposal is to raise it from 35 to 39 %, I believe, far lower than the rates we all grew up with.

          • poorfed says:

            yes, but we had a whole lot more deductions then.  Taxes revenue went up when tax rates went down and deductions were limited.  social programs just keep getting bigger. 

          • grannybunny says:

            The highest tax rate when I was coming up was 90%.  The difference in deductions in no way matches the reduction in rates.  Americans are paying the lowest effective tax rates — meaning the percentage actually paid, after all deductions — in decades.  It’s not the social programs that killed us; it was the 2 unfunded wars.

          • CA says:

            Evaluate history and also analyze the most successful states – and the states that have a huge debt.

          • grannybunny says:

            How would you define “the most successful states?”  I live in Texas, which some would define that way, even though we have the highest percentage of uninsured people, and rank among the last in many measures of quality of life for the average person.  When analyzing taxation, one must answer the question, what is the role of government?  If you see it as representing all of the people and acting in the best interests of all, Texas — as it’s currently governed, with one-party crony capitalism – would be considered a miserable failure.

          • PA says:

             Actually I don’t believe Texas is near the top of the latest list.  BUT …..I love Texas!  People seem to take care of each other.  I visit outside Dallas and we never lock the doors to the home – or our cars.  You can walk down the street without the worry of being attacked / or kill.  Most people are still honest – celebrate Christmas — or at least Texas does not have Christmas under attack.  In addition – gas, housing, food,electric, water, and taxes – are still reasonable.  Regulations do not prevent you from starting and keeping a business.  You have no idea! 
            As far as the uninsured — you can walk into a hospital or clinic anytime and receive good health care.  Many of the farmers do not carry health insurance – but keep a separate account where they put money from each check to pay for future health problems.

          • PA says:

             Not happy – Move! 

          • grannybunny says:

            I would rather stay and do everything I can to improve the situation, which is what I am doing.

      • CA says:

        Some will start a business in China. 

  4. Hopeisnot A. Plan says:

    When I add up my Federal taxes, State taxes, property taxes, Social Security Taxes, Medicare taxes, license fees, telephone taxes, cable taxes, gasoline taxes, sales tax, etc. slightly more than 40% of my income is taken from me by some level of government.  That is an awful lot of dysfunctional government.  Yet my state is in debt more than $200 bullion and the nation has a debt in excess of $16 trillion.  I really don’t think that it is a revenue problem.  Politicians simply spend far too much and make promises that cannot be kept without bankrupting the country.  Any agreement on the “fiscal cliff” must contain a lot of spending cuts or there is no way to get out of this hole.

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