As in the past, people in the highest one-fifth of income got a large share of total income and paid an even larger share of the total tax burden.
The main reason for the difference in tax burden was the difference income tax rates, which were much higher for the top one-fifth. In fact, the bottom two-fifths were in negative territory, largely because of the Earned Income Tax Credit.
Most of the progressivity of the federal tax system derives from the individual income tax. In 2011, households in the lowest quintile of before-tax income had an average tax rate for the individual income tax of -7.5 percent, and households in the second quintile had a rate of -1.3 percent, CBO estimates. (An income quintile has a negative average income tax rate if refundable tax credits in that quintile exceed other income tax liabilities.) The average individual income tax rate was .4 percent for the middle quintile, 5.8 percent for the fourth quintile, and 14.2 percent for the top quintile (see Figure 5). Households in the top 1 percent of the income distribution paid 20.3 percent of their before-tax income in individual income taxes, on average.
