Tax
The federal tax system overall is progressive—with richer households facing higher tax rates than low- and moderate-income households.: Average federal tax rates over time, by percentile, 2018
| Year | Total tax rate |
|---|---|
| Bottom 20% | 6.4% |
| 21–40th | 9.8% |
| Middle 20% | 13.0% |
| 61–80th | 16.3% |
| 81–90th | 19.3% |
| 91–95th | 21.2% |
| 96–99th | 23.9% |
| Top 1% | 29.8% |
Source: Congressional Budget Office, The Distribution of Household Income, 2018 (August 2020).
Supplemental data provided by the Congressional Budget Office with its release of The Distribution of Household Income, 2018 (August 2020). The tax rate is how much households pay in taxes as a share of pretax income (income after receiving benefits such as Social Security and unemployment payments but before paying taxes).
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