Most Americans think they pay too much in federal income taxes, and about 6 in 10 people incorrectly believe that middle-income households bear the highest tax burden.
In fact, only about 18% of adults correctly identified the group facing the highest federal tax burden, high-income Americans, according to a January AP-NORC poll.
With less than a week left to file their 2023 tax returns, taxes are on the minds of millions of Americans, with many waiting for refunds and others owing money. Only about 27% of taxpayers believe their federal income tax is fair, and 60% believe their burden is too high, AP-NORC found.
In fact, the U.S. tax system is designed to be progressive, meaning low-income Americans pay a smaller share of their income in federal taxes than higher-income workers, noted Alex Muresianu, senior policy analyst at the Tax Foundation, a think tank. focused on tax issues.
“Collecting an extra dollar from someone with a higher income is not going to be as much of a burden on them as collecting another dollar from someone with a lower income,” he said.
At the same time, some lawmakers and policy experts are working to increase tax rates on the wealthy, with President Joe Biden proposing to cancel a rate cut on the nation’s highest earners, which was part of the Tax Cuts and Jobs Act of 2017. Under Biden’s proposal, the top marginal rate would rise to 39.6% from its current level of 37%.
In 2021 (most recent data available), the typical earner paid $14,279 in federal income tax, with an average tax rate of 14.9%, according to a recent Tax Foundation analysis of data from the IRS. Federal taxes do not include payroll taxes that cover Social Security and Medicare.
But it’s the top 50% of earners who contribute almost all of the country’s federal taxes, nearly 98%. The poorest 50 percent, who individually earn less than $46,637 a year, account for about 2.3 percent of the country’s tax revenue.
The richest 10%, with incomes of at least $169,800, pay about three-quarters of the nation’s tax bill, according to the analysis.
Although most Americans think the middle class bears the heaviest tax burden, it’s actually the top 1% who pay the highest federal tax rate, at 25.9%, according to the Tax Foundation analysis.
Even so, about 6 in 10 Americans say they are bothered by the feeling that corporations and the wealthy aren’t paying their fair share of taxes, Pew Research found last year. This may explain why about two-thirds of those surveyed said they favored higher taxes on the wealthy.
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