On average, which of the following income groups pays the greatest portion of their income in federal taxes: the poorest 20%, the middle 20%, the top 20%, or the richest 1%?
Correct Answer
The Congressional Budget Office, the U.S. Treasury, and the Tax Policy Center have all documented that the poorest 20% of households pay an average federal tax rate of about 0%, as compared to 12% for middle-income households, 24% for the top 20%, and 30% for the richest 1%. Unlike the tax rates often cited by politicians and journalists, these figures account for nearly all forms of income and all federal taxes, including hidden taxes. They also account for all tax loopholes (aka, preferences) and reflect actual taxes paid, not theoretical rates. According to the latest raw numbers, the poorest 20% of households paid an average of $0 in federal taxes in 2018, as compared to $9,900 for middle-income households, $78,600 for the top 20%, and $602,900 for the richest 1%.
















