The top 10 percent of U.S. earners pay roughly 72 percent of all federal individual income tax, based on the most recent IRS data for tax year 2022. That same group reported 49.4 percent of total income, so their share of the tax bill runs about 22 percentage points ahead of their share of income. Once payroll taxes and other federal levies enter the picture, the top decile’s share of all federal taxes drops somewhat, but still sits around 60 percent or more.
Who Is In the Top 10 Percent
The IRS ranks filers by Adjusted Gross Income. For tax year 2022, you needed an AGI of about $100,000 to land in the top 10 percent. That threshold catches a lot of people who don’t think of themselves as high earners. A married couple with one spouse making $65,000 and the other making $45,000 clears it.
AGI is your wages, capital gains, interest, dividends, and business income, minus a short list of above-the-line deductions like retirement contributions and student loan interest. It appears on line 11 of Form 1040, before the standard or itemized deduction.1Internal Revenue Service. Definition of Adjusted Gross Income The IRS uses AGI, not taxable income or take-home pay, to sort filers into income groups.
Share of Federal Individual Income Tax
In tax year 2022, the top 10 percent paid about 72 percent of all federal individual income tax while reporting 49.4 percent of total AGI. Their average effective federal income tax rate came in around 21 percent.
The contrast with the bottom half is stark. The bottom 50 percent of filers earned 11.5 percent of total AGI, paid roughly 3 percent of the individual income tax, and faced an average effective rate near 4 percent. Refundable credits, primarily the Earned Income Tax Credit and the Child Tax Credit, cut many of those filers’ liability to zero or below.
The individual income tax matters more than any other federal levy because it is the single largest source of federal revenue, roughly half of everything the government collects.2U.S. Treasury Fiscal Data. Government Revenue But the 72 percent figure only covers that one tax. Add payroll, corporate, and excise taxes and the concentration shifts.
Share of All Federal Taxes Combined
Payroll taxes account for about 35 percent of federal revenue.2U.S. Treasury Fiscal Data. Government Revenue They are structured differently from the income tax, and they change the answer.
Payroll Taxes Cap Out
The Social Security portion of the payroll tax applies only to earnings up to $184,500 in 2026. Every dollar above that escapes the 6.2 percent tax entirely.3Social Security Administration. Social Security Tax Limits on Your Earnings Someone earning $80,000 pays the tax on their full paycheck. Someone earning $500,000 stops paying it after the first 37 percent of their income. That wage cap makes payroll taxes regressive in practice and pulls the top decile’s overall tax share down once payroll is folded in.
For most Americans outside the top 10 percent, payroll taxes actually exceed their income tax bill. Combine the employee’s 6.2 percent Social Security contribution and 1.45 percent Medicare contribution with the employer’s matching share and the total often dwarfs whatever a median earner owes in income tax after credits.
Corporate Tax Falls Mostly on the Same Group
The corporate income tax sits at a flat 21 percent after the 2017 Tax Cuts and Jobs Act cut it from 35 percent. Who actually bears that tax is contested among economists. A 2024 Brookings Institution study estimated that between 50 and 80 percent of the corporate tax burden falls on capital owners and shareholders, with the rest passed to workers through lower wages. Since stock ownership and business equity concentrate at the top, most of the corporate tax lands on high earners as well, even though it never appears on their 1040.
The Combined Number
When all federal taxes are combined, Congressional Budget Office data shows the top 20 percent of households paid about 70 percent of total federal taxes in 2022. The top 10 percent’s share of all federal taxes runs below their 72 percent share of income tax alone because the regressive payroll structure dilutes the concentration. A reasonable estimate puts the top decile at roughly 60 percent or more of all federal taxes, though the exact figure depends on how corporate tax and the employer share of payroll are allocated.
Extra Taxes That Fall Almost Entirely On Top Earners
Two surtaxes push the top group’s effective rate higher. The Additional Medicare Tax adds 0.9 percent on wages above $200,000, with no employer match.4Internal Revenue Service. Publication 926, Household Employer’s Tax Guide The Net Investment Income Tax adds 3.8 percent on investment income when modified AGI exceeds $200,000 for single filers or $250,000 for joint filers.5Internal Revenue Service. Questions and Answers on the Net Investment Income Tax Neither threshold adjusts for inflation, so more filers cross into these taxes every year. Both fall almost entirely on the top 10 percent.
The federal estate tax adds another layer that lands only at the very top. The exemption is $15 million per person for 2026, or $30 million for a married couple, with rates on amounts above that reaching 40 percent.6Internal Revenue Service. What’s New — Estate and Gift Tax Very few estates owe any federal estate tax, but the ones that do owe it exclusively at the top of the income distribution.
Why the Share Swings From Year to Year
Capital gains drive most of the year-to-year movement in the top group’s tax share. An IRS study found that 75.7 percent of all capital gains flow to the top 10 percent, with 45.3 percent going to the top 1 percent alone.7Internal Revenue Service. The Distribution of Capital Gains in the United States In a strong market year, realized gains surge, AGI at the top spikes, and the measured tax share jumps. In a downturn, the share drops even if nothing else about the tax code has changed.
Long-term gains also carry their own rate schedule. The top 20 percent rate applies at $545,500 for single filers and $613,700 for joint filers in 2026; gains below those thresholds face 0 or 15 percent. Those preferential rates mean capital gains income is taxed more lightly than wages at the same level, which lowers the effective rate for investors who earn a large share of their income from asset sales.
How the Share Has Changed Over Time
The top group’s share of individual income tax has climbed steadily since the 1980s, including through periods when Congress cut top marginal rates. The top 1 percent alone went from paying about 33 percent of income taxes in 2001 to over 40 percent by 2022. Part of that reflects income itself becoming more concentrated at the top: even at a constant rate structure, the top group’s tax share grows when their income share grows.
Policy shifts also matter. When the TCJA cut the corporate rate in 2017, some business owners moved income from the corporate side to the individual side through pass-through structures. That shift shows up in the statistics as more individual income tax paid by top earners, even when the combined corporate-plus-individual burden didn’t change much for those owners. The expansion of refundable credits over the last two decades has simultaneously erased income tax liability for many lower-income filers, which mechanically pushes the top group’s share of the remaining tax higher.