Fact Check: Do the bottom half of workers in the U.S. contribute 3% of all taxes?
No
While the bottom half of U.S. workers pay about 3% of collected income tax, when factoring in all other taxes — payroll taxes, sales taxes, state and city taxes, and others — they represent a significantly higher portion of revenue.
The bottom 60% of income earners contributed an estimated 16.4% of total tax revenue in 2024, according to the Institute on Taxation and Economic Policy.
The regressive payroll tax, which funds Social Security and Medicare, represents the highest tax burden for low-income taxpayers. It is currently 7.65% of gross wages for all income brackets. Medicare accounts for 1.45% while Social Security is 6.2%. For the latter, taxes are not collected on income above $184,500.
The flat sales and excise taxes are also regressive since low-income households spend a larger percentage of their pay on goods and services than richer households.
This fact brief is responsive to conversations such as this one.
Sources:
IRS SOI Tax Stats – Individual Statistical Tables by Tax Rate and Income Percentile
Institute on Taxation and Economic Policy Who Pays Taxes in America in 2024
Center on Budget and Policy Priorities Where does Federal Tax Revenue Come From?
Tax Policy Center How does the Federal Tax System affect Low-Income Households?
Tax Foundation Summary of the Latest Federal Income Tax Data, Tax Year 2023
Social Security What is the Current Maximum Amount of Taxable Earnings for Social Security?
Tax Foundation Regressive Tax
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