What Percentage of Americans Pay Federal Income Taxes?

by Dave Hendrickson
More than half of all Americans pay federal income tax.

The question of how many people pay federal income taxes became a heated topic toward the end of the 2012 presidential campaign after Republican nominee Mitt Romney was videotaped telling supporters that 47 percent of Americans paid no federal income taxes. Romney was correct. Roughly 53 to 54 percent of Americans pay federal income tax annually. The other 46 to 47 percent for a variety of reasons, owe no federal income tax.

Paying No Income Tax

About half of the people who pay no federal income tax simply have a low-enough income that they owe no tax. A couple earning about $26,000 who have two children would have had a taxable income of zero for the 2011 tax year because of the standard deduction and the four exemptions they are entitled to take. Most of the rest of the people who do not owe federal income tax are elderly and no longer work.

Paying Other Payroll Taxes

The income tax is not the only federal tax that Americans pay. Taxes are also withdrawn from every working person’s paycheck to pay for Social Security and Medicare. So in addition to the 53 percent of Americans who pay income tax, an additional 28 percent have payroll taxes deducted from their income. That brings the total number of Americans who pay some federal tax to roughly 81 percent.

Paying No Federal Taxes At All

Some Americans -- 18 to 19 percent -- pay no federal taxes at all, neither income nor payroll taxes. More than half of those people are elderly. The rest have incomes so low that they are not required to pay.

Who Pays the Biggest Share of Taxes?

The people who are in the top 20 percent of incomes pay 70 percent of all federal taxes collected as of 2013. A single person with a salary of roughly $75,000 or higher would fall into that category, as would a family of four with an income of $150,000 or more.

Who Gets the Most Tax Breaks?

Interest paid on a mortgage is the largest single tax deduction for most people.

Those people who are in the top 20 percent in income also receive about two-thirds of all tax deductions, including the deduction for interest paid on home mortgages. They also get most of the tax relief that comes from paying a lower tax rate on capital gains because they are more likely to have income from stocks and bonds. The top 5 percent of earners in the United States get about 41 percent of the savings that come from tax deductions, as of 2013.

About the Author

Dave Hendrickson has been writing and editing professionally since 1980. He has received awards from the Milwaukee Press Club, Virginia Press Association and Investigative Reporters and Editors. Hendrickson holds a Bachelor of Arts in journalism from the University of Wisconsin and a Master of Fine Arts in creative writing from Virginia Commonwealth University.

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