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why is federal income tax so high

Americans have many questions about why the federal income taxes are so high. It is unfair that taxpayers with the highest incomes pay more than those who have largely been subsidized by government. There are many reasons why the income tax rate is so high, and these are outlined in this article. In addition, we’ll explore what is driving the current rate.

Federal government gets a lot of revenue from many sources including Social Security, Medicare payroll taxes and unemployment insurance taxes. The federal government also borrows money to cover spending not covered by taxes. The individual income tax rates have been designed to be progressive so that taxpayers with higher income pay less. Taxpayers with incomes greater than $200,000 pay more of the federal income taxes. This group accounts for 6.8% of all tax returns.

On average, the top one percent of Americans pay 29 percent of their total income. The bottom third, however, pays just a third. This isn’t particularly progressive. This is partly due to the fact that many high-income groups pay lower rates compared to lower-income taxpayers. Many economists think that reforms could be made to increase economic growth, even though the current tax rate remains high. The tax system could become more efficient and transparent, thus promoting economic growth.