Chart assignment
Charts to read and discuss
Read each chart, then answer its questions. Every chart shows its source and date; open it for a table of the numbers and the data to download.
Chart 1 of 1 · Income tax
What average income tax rate does each income group pay?
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In tax year 2023, the 0.1% of tax returns with the highest incomes paid 26.7% of their adjusted gross income in federal income tax, on average. The rate was 25.9% for the rest of the top 1%, 16.8% for the next 9%, 10.6% for the next 15%, 7.7% for the next 25% and 3.7% for the bottom half. The average rate is total income tax divided by total income for each group, which is lower than the top bracket rate (37%) because lower rates apply to the first dollars of income and to long-term capital gains and most dividends. It counts income tax after credits, never below zero, and leaves out payroll taxes for Social Security and Medicare, which weigh more on lower and middle incomes, as well as returns of people claimed as dependents.
Questions to discuss
- In one sentence of your own, what does this chart show?
- Find the biggest change or difference in the chart. What might explain it?
- Who collected these numbers, and how recent are they? What else would you want to know before drawing a conclusion?
Source: IRS Statistics of Income, Table 4.1 (individual returns by income percentile) (Public domain (U.S. government work)) · Data as of Dec 31, 2023
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