How much of your income actually goes to taxes, when you add up federal, state and local taxes?
Answer: 29%
To ask:
- What is the average federal tax rate?
- What is the relationship between income and average tax rate?
- Is the average tax rate higher or lower than you expected? Why?
- Do you think the American tax system is fair? Why or why not?
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Behind the numbers (ITEP):
“The U.S. federal tax system tends to be relatively progressive, meaning that it requires the wealthy to pay more relative to their income than others, while state and local taxes in most states are regressive, meaning that they take a greater share of income from the poor than from the wealthy. The progressive aspects of the federal tax system offset the regressive aspects of the state and local tax system, so that taxes for each income group are, on the whole, roughly proportional to income.
The federal personal income tax is a progressive tax because it applies at higher marginal rates to higher income levels and includes features such as the Earned Income Tax Credit (EITC), which benefits low-income working people, and the refundable portion of the Child Tax Credit (CTC), one of the few federal policies that directly addresses child poverty…
The estimates in this analysis take into account all major federal, state, and local taxes that Americans pay.”
About the author
Kathryn Dawson
Kathryn (she/her) is excited to join the NGPF team after 9 years of experience in education as a mentor, tutor, and special education teacher. She graduated from Cornell University with a degree in policy analysis and management and received a master’s degree in education from Brooklyn College. Kathryn looks forward to bringing her passion for accessibility and educational justice to curriculum design at NGPF. In her free time, Kathryn enjoys tackling cooking projects, walking her dog around the Seattle neighborhood, or lounging in a hammock with a book.
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