Federal Income Taxes: A Nod to the 1 Percent

An estimated 45.3 percent of American households—roughly 77.5 million households—pay no federal individual income tax, according to data for the 2015 tax year and the Tax Policy Center, a nonpartisan Washington-based research group.

Among those who do not pay federal income tax, roughly half have no taxable income. The other roughly half get enough tax breaks to erase their tax liability, explains Roberton Williams, a senior fellow at the Tax Policy Center.

The much-discussed wealthiest 1 percent of Americans, whose average income is more than $2.1 million, pay 43.6 percent of all the federal individual income tax in the U.S. The top tenth of a percent, whose average income is more than $9.4 million (115,000 households), pay more than 20 percent of all federal individual income tax.

Taking a broader look, the wealthiest 20 percent of Americans pay the most in income taxes, paying nearly 87 percent of all the income tax collected by Uncle Sam. in 2014, the top 20 percent earned an average of $134,300 a year.

On average, those in the bottom 40 percent of the income spectrum end up getting money from the government.

Source: Marketwatch S