Which Brackets Pay the Most? Federal Tax Revenue Share by Income Group

Findings

The highest earners paid 42.3% of all federal income tax in 2022

In tax year 2022, taxpayers in the top percentile by adjusted gross income (those earning above approximately $663,000) paid 42.3% of all federal individual income tax collected. Their share of total AGI was 26.3%, meaning they paid tax at an effective rate roughly 1.6 times their share of national income. The average effective federal income tax rate for this group was 25.4%. This concentration has increased over two decades: in 2001, these highest earners paid 33.9% of federal income tax on 17.5% of AGI.

The top 5% (AGI above roughly $265,000 in 2022) accounted for 63.6% of all federal income tax revenue. This group earned 40.3% of total AGI. The top 10% paid 73.7% of the total, meaning the remaining 90% of filers contributed about 26.3% of federal income tax receipts. These figures underscore how heavily the federal revenue system depends on a narrow slice of high earners. Our bracket tables show the thresholds that push filers into these upper tiers.

Between 2001 and 2022, the highest earners' share of federal income tax payments rose from 33.9% to 42.3% - an 8.4 percentage-point increase. Over the same period, their share of AGI grew from 17.5% to 26.3%. Both income concentration and tax progressivity contributed to the rising revenue share. The Bush-era tax cuts (2001, 2003), the Obama-era upper-income rate increases (2013), and the Trump-era Tax Cuts and Jobs Act (2018) each produced temporary shifts in these shares, but the long-term trend is upward.

The lower half contributed 2.3% of federal income tax

Filers in the bottom half of the AGI distribution (roughly below $46,000 in 2022) paid 2.3% of all federal individual income tax. Their share of total AGI was 10.6%, yielding an average effective rate of roughly 3.7%. This low rate reflects the interaction of the standard deduction, Earned Income Tax Credit, and the 10% bracket, for many filers in this group, federal income tax liability is zero or negative after refundable credits.

The lower half's share of federal tax payments has declined over time: from 4.1% in 2001 to 2.3% in 2022. Part of this decline stems from stagnant wages in the lower half of the distribution relative to upper-income growth, and part from policy choices that expanded credits and deductions. The standard deduction doubled under the TCJA in 2018, removing millions of filers from the income tax rolls entirely. Our deductions and contribution limits page tracks these changes year by year.

Importantly, the 2.3% figure covers income tax only. Payroll taxes (Social Security and Medicare) are regressive above the wage base cap, the lower half pays a much larger share of payroll tax revenue than of income tax revenue. When both taxes are combined, the effective total federal rate for this group rises substantially above the income-tax-only figure.

Middle-income groups bear a stable but meaningful share

Filers between the 50th and 90th percentiles, a broad middle class spanning AGI from roughly $46,000 to $265,000, paid 23.7% of federal income tax in 2022 while earning 42.1% of AGI. Their average effective rate was approximately 11.7%. This group includes the bulk of dual-income households, and their tax liability is where bracket decisions matter most. A shift from the 22% bracket to the 24% bracket at $100,525 (single, 2025) is the most common bracket transition for this group. Our bracket explanation guide covers how this works.

The 75th-to-90th percentile group (roughly $100K to $265K AGI) paid 12.8% of total federal income tax on 18.0% of AGI. Their effective rate of about 15.5% reflects the phase-in of the 24% and 32% brackets. The 50th-to-75th percentile group paid 10.9% of tax on 24.1% of AGI, with effective rates around 9.5%. These middle groups have seen relatively stable tax shares over the past decade, with the TCJA producing a modest reduction through lower bracket rates (the 15% bracket became 12%, the 25% bracket became 22%).

For households in this range, the federal tax calculator shows the exact bracket-by-bracket breakdown. The gap between the 24% bracket ceiling and the 32% bracket start ($191,950 for single filers in 2025) creates a notable jump in marginal rates that affects tax planning decisions for households near that threshold. Our planning guide addresses strategies for this transition zone.

Implementation notes for analysts

Researchers should be cautious when comparing IRS SOI shares across years with major tax legislation. The TCJA (2018) changed both bracket thresholds and the definition of taxable income, creating a structural break in the time series. Returns with large capital gains skew top-percentile filers in years with strong equity markets, inflating both income and tax shares in those years relative to adjacent periods. Non-filers (approximately 10-15% of the adult population) are invisible in SOI data, understating the true bottom of the income distribution. Partnership and S-corporation income reported on Schedule E flows through to individual returns but may be reinvested rather than consumed, complicating welfare comparisons across groups. The Congressional Budget Office publishes a more comprehensive distributional analysis that includes all federal taxes and transfers, which provides a fuller picture than income-tax-only shares.

International comparisons and context

The United States relies more heavily on individual income taxation than most OECD nations. In 2022, individual income tax accounted for approximately 49% of total federal revenue, compared to the OECD average of roughly 34%. Payroll taxes contributed another 36%, while corporate income tax contributed only about 10%. This revenue composition means that changes affecting high earners, who pay the largest share, have outsized effects on government finances. A recession that disproportionately reduces capital gains realizations among top earners could theoretically cause federal revenue to decline more sharply than in peer nations with broader tax bases.

The progressivity of the U.S. federal income tax system has increased over the past two decades, largely because income concentration at the top has outpaced the growth in middle-class earnings. The top marginal rate has remained at 37% since 2018 (down from 39.6% pre-TCJA), but because income growth at the top has been faster, the effective progressivity of the system has risen. Several proposals in Congress would further increase top marginal rates or introduce wealth taxes, which would amplify the revenue concentration documented here. Understanding the current distribution is essential for evaluating any proposed reforms.