By
CATEYHILL
EDITOR
Many Americans don’t have to worry about giving Uncle Sam part of their hard-earned cash for their income taxes this year.
An estimated 45.3% of American households — roughly 77.5 million — will pay no federal individual income tax, according to data for the 2015 tax year from the Tax Policy Center, a nonpartisan Washington-based research group. (Note that this does not necessarily mean they won’t owe their states income tax.)
Also see: Americans pay more in taxes than for housing, food, clothes combined
Roughly half pay no federal income tax because they have no taxable income, and the other roughly half get enough tax breaks to erase their tax liability, explains Roberton Williams, a senior fellow at the Tax Policy Center.
Despite the fact that rich people paying little in the way of income taxes makes plenty of headlines, this is the exception to the rule: The top 1% of taxpayers pay a higher effective income-tax rate than any other group (around 23%, according to a report released by the Tax Policy Center in 2014) — nearly seven times higher than those in the bottom 50%.
Read: Compared to most countries, we’re undertaxed
On average, those in the bottom 40% of the income spectrum end up getting money from the government. Meanwhile, the richest 20% of Americans, by far, pay the most in income taxes, forking over nearly 87% of all the income tax collected by Uncle Sam.
Read: Compared to most countries, we’re undertaxed — honest
Rich people pay nearly 87% of all federal individual income tax in America
| Income level | Share of total federal
individual income tax paid | Average income tax bill
per person | | Lowest 20% | -2.2% | -$643 | | Second lowest 20% | -1.7% | -$621 | | Middle income | 4.2% | $1,743 | | Second richest 20% | 12.9% | $6,285 | | Richest 20% | 86.8% | $50,176 |
Source: Tax Policy Center |
