New IRS Data Undercuts “Tax the Rich” Narratives

Majorities of Americans support “taxing the rich,” but according to the latest data, we already do a pretty thorough job of it. (Tax Foundation)

New IRS data: The top 1% of taxpayers paid an average tax rate of 26.1% in 2022, seven times higher than the 3.7% average rate for the bottom 50%.

Zoom in: The top 1% contributed 40.4% of all federal income taxes while earning 22.4% of total adjusted gross income.

• The bottom 50% of taxpayers earned 11.5% of AGI and paid only 3% of total income taxes.

• High-income taxpayers, particularly the top 1%, paid more in federal income taxes than the bottom 90% combined.

• From 2001 to 2022, the share of income taxes paid by the top 1% rose from 33.2% to 40.4%, while the bottom 50%'s share fell from 4.9% to 3%.

The vibes: Increasing taxes on corporations and wealthy Americans is a popular idea that cuts across party and racial lines.

The impact: Per a Cato Institute analysis, even if we took the radical step of confiscating each single dollar made by every American earning $500,000 or more, it’d bring in only $1.5 trillion in revenue.

• The national debt sits at a record-high $35.9 trillion and counting.

• The federal government’s yearly budget is more than $6 trillion.