BTC BRIEF: Who Pays Taxes? The Poor, the Rich, and Everyone in Between

By Edwin McLenaghan
Policy Analyst, Budget & Tax Center
Nov. 2010


Virtually every household pays taxes, and even the poorest fifth of American households paid an average of one-sixth (16 percent) of their total income in federal, state, and local taxes in 2009.

The wealthiest 1 percent of households in the country, with annual incomes averaging over $1.3 million, paid under one-third (30.7 percent) of their income in total taxes in 2009. In 1970, the wealthiest 1 percent of households paid over two-fifths (42 percent) of their income in federal taxes alone.

Low- and middle-income families with stagnating and declining incomes often forgo basic necessities to pay their federal, state, and local taxes. The wealthy pay their taxes by reducing their savings rate.

Letting the Bush tax cuts for the wealthiest expire and using the revenue for pro-jobs policies would still leave the wealthiest paying lower tax rates than they have for most of the last half-century and put the economy on the path to recovery. 


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