The topic of income taxation in the United States often sparks heated debates, particularly when it comes to the contributions of the wealthiest citizens. A recent visualization from Voronoi, based on IRS data via the Tax Foundation, sheds light on the tax burdens of different income groups in 2022. The data reveals that the top 1% of U.S. earners paid an average income tax rate of 26.1%, significantly higher than the national average of 14.5%. This blog dives into the details of these findings, explores the broader context of income taxation, and examines the implications for economic policy and public perception.

Key Takeaways from the Data

In 2022, the average American paid 14.5% of their income in federal income taxes, according to the IRS. However, this figure varies dramatically across income brackets:

• Top 1%: These earners, representing roughly 1.5 million taxpayers with a minimum income of $663,164, faced an average income tax rate of 26.1%. Collectively, they contributed $864 billion in income taxes, accounting for 40% of the total federal income tax revenue.
• Top 5% (excluding the top 1%): This group paid an average tax rate of 18.8%.
• Bottom 50%: Comprising the lower half of earners, this group paid an average tax rate of 3.7%, contributing just 3% of the total income tax revenue.

These figures highlight the progressive nature of the U.S. federal income tax system, where higher earners shoulder a disproportionately large share of the tax burden. However, the data excludes payroll taxes, which tend to make up a larger share of taxes for lower-income groups relative to their income.

The Top 1%: Who Are They?

The top 1% of earners in 2022 were individuals or households with incomes starting at $663,164. This group includes high-earning professionals, business owners, investors, and executives. Their significant contribution to federal income taxes—40% of the total in 2022, up from 33.2% in 2001—reflects both their high incomes and the progressive tax structure. The increase in their share of tax revenue over the past two decades is largely due to substantial wealth gains among the richest Americans, which have driven up their taxable income.

To put this in perspective, the top 1% paid an average of $562,000 per taxpayer in federal income taxes in 2022. This is a stark contrast to the bottom 50%, whose average tax contributions are significantly lower due to lower incomes and a smaller tax rate. However, the exclusion of payroll taxes in these figures is critical, as Social Security and Medicare taxes disproportionately affect lower and middle-income earners, who rely more heavily on wage income.

The Role of Payroll Taxes

While the Voronoi visualization focuses on federal income taxes, it’s important to consider payroll taxes to get a fuller picture of the tax burden. Payroll taxes, which fund Social Security and Medicare, are levied at a flat rate but capped at a certain income level ($168,600 for Social Security in 2025). This means that high earners pay a smaller percentage of their total income in payroll taxes compared to lower earners. For the bottom 50%, payroll taxes can represent a significant portion of their overall tax liability, making their effective tax rate higher than the 3.7% income tax rate suggests.

This distinction is crucial for understanding tax fairness. While the top 1% pay a high share of income taxes, their overall tax burden (including payroll, state, and local taxes) may not be as disproportionate when viewed as a percentage of their total wealth or income. A 2024 Treasury report noted that when state, local, and foreign taxes are included, the effective tax rate for the wealthiest Americans can approach 45%, and even 60% with foreign taxes. This suggests that the U.S. tax system is highly progressive, but debates persist about whether it sufficiently addresses wealth inequality.

Historical Trends and Policy Implications

The increasing share of federal income taxes paid by the top 1%—from 33.2% in 2001 to 40% in 2022—reflects several economic trends. First, income inequality has grown, with the wealthiest Americans seeing faster income growth than other groups. Second, tax policies have evolved to maintain progressivity, with higher tax rates for top earners. The highest federal income tax rate in 2022 was 37%, applied to incomes above $628,300 for couples, though deductions, credits, and tax-avoidance strategies can reduce effective rates for some.

However, the data also raises questions about tax avoidance among the ultra-wealthy. A 2021 ProPublica investigation revealed that some billionaires, such as Jeff Bezos and Warren Buffett, paid little to no federal income taxes in certain years by leveraging legal tax-avoidance strategies. These strategies often involve deriving wealth from assets like stocks or property, which are not taxed as income until sold. This highlights a key limitation of the U.S. tax system: it primarily taxes income, not wealth, which allows some of the richest Americans to minimize their tax liability despite massive wealth growth.

Policy proposals to address this issue include wealth taxes, higher capital gains taxes, or reforms to tax unrealized gains. For example, a 2024 Voronoi graphic explored the revenue potential of a 2% wealth tax on billionaires, which could generate significant funds for public services. However, such proposals face political and logistical challenges, including concerns about reduced consumer spending and economic growth.

State-Level Variations

The Voronoi data focuses on federal income taxes, but state tax policies also play a significant role in shaping the overall tax burden. Some states, like New York and California, have high income tax rates, contributing to a heavier tax burden for top earners. For example, New York has the highest individual income tax burden in the U.S., with residents paying 12% of their income to state and local governments on average. In contrast, states like Texas, Florida, and Washington have no state income tax, which benefits high earners disproportionately.

A 2025 GO Banking Rates report found that the top 1% in California paid $122 billion in state income taxes, followed by Florida ($96 billion), Texas ($81 billion), and New York ($79 billion). These figures underscore the significant contributions of wealthy taxpayers in hightax states, but also highlight how state policies can influence where high earners choose to live.

Public Perception and Fairness

The Voronoi visualization and related data often fuel debates about tax fairness. Some argue that the top 1%’s 40% share of federal income taxes demonstrates that the wealthy pay their fair share. Others contend that their effective tax rates are too low relative to their wealth, especially given the tax-avoidance strategies available to the ultra-rich. Public opinion is divided: a 2025 Economist/YouGov poll found Americans split on whether tax-exempt statuses for institutions like Harvard should be reconsidered, reflecting broader scepticism about tax loopholes.

The progressive tax system is designed to reduce income inequality by redistributing wealth through public services like healthcare, education, and social security. However, critics argue that it can discourage consumer spending and economic growth by reducing disposable income. Conversely, low-tax environments, like those in certain Middle Eastern countries or U.S. states with no income tax, may boost spending but limit public service funding.

Conclusion

The Voronoi visualization provides a compelling snapshot of the U.S. income tax landscape in 2022, highlighting the outsized contributions of the top 1% and the progressive nature of the federal tax system. Their 26.1% average income tax rate and 40% share of tax revenue underscore their significant role in funding federal programs. However, the exclusion of payroll taxes, the potential for tax avoidance, and variations in state tax policies complicate the narrative of tax fairness.

As policymakers grapple with rising income inequality and budget demands, the debate over how to tax the wealthiest Americans will likely intensify. Proposals for wealth taxes or reforms to capital gains taxation could reshape the system, but they must balance economic growth with the need for equitable contributions. For now, the data from Voronoi and the IRS offers a valuable starting point for understanding who pays what—and why it matters.