The bottom 50 percent of taxpayers (taxpayers with AGI below $43,614) faced an average income tax rate of 3.4 percent. The 2018 IRS data shows that taxpayers with higher incomes paid much higher average income tax rates than lower-income taxpayers. High-Income Taxpayers Paid the Highest Average Income Tax Rates The share of AGI reported by the bottom 50 percent of taxpayers fell from 14.4 percent in 2001 to 11.6 percent in 2018. It fluctuated considerably over the business cycle, rising with expansions and falling with contractions to a greater extent than income reported by other groups. Similarly, the share of adjusted gross income reported by the top 1 percent increased from 17.4 percent in 2001 to 20.9 percent in 2018. Over the same period, the share paid by the bottom 50 percent of taxpayers fell from 4.9 percent to just below 3 percent. The share of income taxes paid by the top 1 percent increased from 33.2 percent in 2001 to a high of nearly 40.1 percent in 2018. The top 1 percent of taxpayers paid roughly $615 billion, or 40.1 percent of all income taxes, while the bottom 90 percent paid about $440 billion, or 28.6 percent of all income taxes. In 2018, the top 1 percent of taxpayers accounted for more income taxes paid than the bottom 90 percent combined. In contrast, the top 1 percent of all taxpayers (taxpayers with AGI of $540,009 and above) earned 20.9 percent of all AGI in 2018 and paid 40.1 percent of all federal income taxes. This group of taxpayers paid $45.1 billion in taxes, or roughly 3 percent of all federal individual income taxes in 2018. In 2018, the bottom 50 percent of taxpayers (those with AGI below $43,614) earned 11.6 percent of total AGI. High-Income Taxpayers Paid the Majority of Federal Income Taxes Source: IRS, Statistics of Income, Individual Income Rates and Tax Shares. “Income split point” is the minimum AGI for tax returns to fall into each percentile. Note: Table does not include dependent filers. Summary of Federal Income Tax Data, Tax Year 2018 The share of AGI reported by the top 1 percent fell slightly to 20.9 from 21.0 percent in 2017, while the income tax burden share increased by 1.6 percentage points to 40.1 percent from 38.5 percent in 2017. The average individual income tax rate for all taxpayers fell from 14.6 percent to 13.3 percent. ![]() Altogether, taxpayers paid $1.5 trillion in income taxes in 2018, down about 4 percent from 2017. While the number of returns and amount of AGI rose, total income taxes paid fell by $65 billion. Average AGI rose by $3,806, or 5 percent. ![]() That is just over 1 million more returns filed than in 2017 and $627 billion more in AGI reported than in 2017. Taxpayers reported $11.6 trillion in adjusted gross income (AGI) on 144.3 million tax returns in 2018, the year the Tax Cuts and Jobs Act (TCJA) took effect. Reported Income Increased While Taxes Paid Decreased in Tax Year 2018 The top 1 percent of taxpayers paid a 25.4 percent average individual income tax rate, which is more than seven times higher than taxpayers in the bottom 50 percent (3.4 percent).The top 1 percent paid a greater share of individual income taxes (40.1 percent) than the bottom 90 percent combined (28.6 percent).In 2018, the top 50 percent of all taxpayers paid 97.1 percent of all individual income taxes, while the bottom 50 percent paid the remaining 2.9 percent.Since 2001, the share of federal income taxes paid by the top 1 percent increased from 33.2 percent to a new high of 40.1 percent in 2018.Their share of federal individual income taxes rose by 1.6 percentage points to 40.1 percent. The share of reported income earned by the top 1 percent of taxpayers fell slightly, to 20.9 percent in 2018 from 21 percent in 2017.The number of returns filed and the amount of income reported grew in 2018 yet average tax rates fell across every income group and total income taxes paid decreased by $65 billion. Tax year 2018 was the first under the Tax Cuts and Jobs Act (TCJA). ![]()
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