Who Pays Taxes in America in 2020?
Progressive taxation requires the rich to pay a higher share of their income in taxes than poor people. Most of us intuitively understand that the richest households benefit the most from the society built with our tax dollars and can afford to pay a larger share of their income to support public investments. But when one considers all the taxes that Americans pay, it turns out that our tax system overall is barely progressive. Having a sound understanding of who pays taxes and how much is a particularly relevant question now as the nation grapples with a health and economic crisis that is devastating lower-income families and requiring all levels of government to invest more in keeping individuals, families and communities afloat.
This year, the share of all taxes paid by the richest 1 percent of Americans (24.3 percent) will be just a bit higher than the share of all income going to this group (20.9 percent). The share of all taxes paid by the poorest fifth of Americans (2 percent) will be just a bit lower than the share of all income going to this group (2.8 percent).
ITEP generated these estimates using its tax model, which calculates different types of taxes using a dataset of representative taxpayers. In order to reflect the long-term state of our tax system, these figures do not take into account the recent economic downturn or the temporary tax provisions enacted to address it.
