Economy
Minimum wage in America: How many people are earning $7.25 an hour?
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The federal government generated $4.47 trillion in revenue in fiscal year 2023, nearly half of which came from taxing people on their incomes. Individual income taxes in FY 2023 totaled $2.18 trillion, or $6,499 per person.
Most of the government’s federal income tax revenue comes from the nation’s top income earners. In 2021, the top 5% of earners — people with incomes $252,840 and above — collectively paid over $1.4 trillion in income taxes, or about 66% of the national total. If you include the top 10% — everyone who made at least $169,800 — that figure rises to $1.7 trillion, or 76% of the total.
The top 50% of earners contributed 97.7% of federal income tax revenue.
Of course, people are taxed on more than their income. They also pay into Social Security and Medicare through payroll taxes. Plus, they’re subject to state, local, and sales taxes.
Taxable income includes:
Individual taxpayers are taxed a percentage of their income, and that percentage depends on how much money they make in a year.
These taxes are paid on the portions in each tax bracket. For instance, a single earner with a total income of $100,000 would pay 10% on $11,600, 12% on the next $35,550 (bringing them to $47,150), and then 22% on the remaining $52,850.
Taxpayers may adjust the amount owed to the Internal Revenue Service for any applicable deductions or credits.
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