Research report
June 25, 2007
Primary tasks
Abstract
Overall, the federal tax system is highly progressive: On average, households with higher incomes pay taxes that are a larger share of their income. The 2007 average effective federal tax rate tax paid as a percentage of cash income rises from 3.4 percent for the bottom quintile or fifth of the income distribution to 25.9 percent for the top fifth.1 Within the top quintile, average rates climb from 30.4 percent for the top 1 percent to 32.8 percent for the top one-tenth of 1 percent. The individual income tax is the most progressive of the major revenue sources while payroll taxes for Social Security and Medicare are regressive.
Research Area
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