The top US income tax rate hit 94% near the end of World War II and hasn't topped 40% since 1987.

Corporate taxes, which make up roughly a third of the federal government's revenue, have been calculated using a flat 21% rate since the Tax Cuts & Jobs Act of 2017. The current rate is considered low both by historic standards (it averaged over 50% in the 1950s and 1960s) and compared to other countries.

In the US, the top 1% of earners contribute 45% of all personal income taxes collected nationwide. But not all states are created equal when it comes to income tax. Some states are more dependent on the 1% than others for tax revenue. SmartAsset recently examined IRS tax return data to determine exactly how much the top 1% of earners in each state paid in taxes. Find your state here.

To understand what you would owe on short-term capital gains and to visualize the favorability of long-term tax rates, you need to know how your traditional income is taxed at the federal level. A breakdown explores the different brackets for 2024, separated by filing status.

That's according to data from Pew Research Center. While most people are primarily taxed on their wages, many people in America's 1% derive much of their income from investments instead, which are often taxed at preferential capital gains rates. This structure was shaped by a series of legislative cuts that began in earnest with the 1978 Revenue Act and the 1981 Economic Recovery Tax Act.

The US first levied income taxes during the Civil War, but modern income taxes became an American fixture in 1913. Two years earlier, Congress passed the 16th Amendment to give the government the right to tax individuals' and businesses' income. The US still technically levies the same federal income tax now as it did then—though it's evolved.

Some states in the US have higher taxes than others. Hawaii, for instance, has the highest total tax burden in the country at 13.9%, whereas Alaska has the lowest overall tax burden at 4.9%. New York has the highest individual income tax burden; and eight states have no individual income tax. See a map of the most-taxed US states here.

The US government historically makes nearly half of its total revenue last year from individual income taxes. But the US makes also makes money from a variety of other sources, including Medicare taxes and corporate income taxes. However, the federal government has run a deficit since 2001—reaching a peak of $3.13T in 2020.

However, up until 1921, they were treated the same as ordinary income. Ever since then, rates have swung up and down.

The term "tax burden" in this case refers to property, income, sales, and excise taxes as a share of total personal income. Alaska and New Hampshire have the lowest total tax burdens in the US, both falling below 6%.

The system behind the US income tax isn't as straightforward as it looks. You earn money. Taxes get taken out. Case closed … right? Not exactly. In this episode of "1440 Explores," we break down how the US tax system actually works, from confusing deductions and misunderstood tax brackets to why the wealthiest Americans often end up paying a very different tax than everyone else.

Recent IRS data shows that between 2011-16, that number dropped even lower: The federal estate tax only impacts about 0.2% of Americans. Death taxes typically only impact the rich, and the federal estate tax is no exception.

WalletHub researchers evaluated not just income taxes but real estate, sales, and other levies in order to rank every state by its total effective local and state tax rate (not including federal). Alaska scored the lowest total tax rate and Illinois...

The concept of taxing unrealized capital gains—when an asset’s value increases but has yet to be sold—has been increasingly debated. Other policymakers in recent years have supported lowering the highest long-term capital gains tax rate and are generally opposed to levying taxes on unrealized capital gains.

Recent data from the Federal Reserve shows that the richest people in America own 93% of all the country's stock—the highest level ever recorded. Meanwhile, the bottom 50% of Americans held just 1% of all stocks.

Wisconsin was the first US state to impose a state income tax, close in time to when the federal income tax went into effect. Many states followed suit, but nine states to this day still don't levy wage-related taxes.

It was created to collect the first-ever US income tax, which was created to help pay for the Civil War. After gaining their independence from Britain, Americans were skeptical about giving the federal government absolute power to collect federal income taxes. As a result, early US tax laws dictated that direct taxes, like income taxes, had to be directly apportioned to a state's population. The nation went back and forth on its federal tax laws multiple times. For instance, in 1872, the income tax from the Civil War was repealed. But it was revived in 1894, and then repealed again in 1895. In 1913, Congress passed the 16th Amendment, giving Congress the power to levy income taxes on individuals and corporations without apportioning the burden among the states in line with population, once and for all.

About 50 percent of federal revenue comes from individual income taxes, 7 percent from corporate income taxes, and another 36 percent from payroll taxes that fund social insurance programs. See breakdown in charts here.

One of the main purposes of the federal estate tax is to crack down on generational wealth, so wealth isn't concentrated among a select few. However, the ultra-rich have found ways around paying these taxes. This ProPublica article investigates the practices used by half of the 100 richest people in the US to avoid death taxes.

Taxes are a major revenue source for most countries, and how each government taxes citizens often reflects the country's economy. Developed countries tax at much higher rates than developing ones, and as a country grows its GDP, it also typically grows the proportional percentage of taxes it gains from its citizens.

Ratified in 1913, the 16th Amendment paved the way for a far-reaching federal income tax and supercharged the country’s coffers. Before then, the US depended on import tariffs and so-called consumption taxes to raise revenue.

The 1920s defined capital gains as “unearned” taxable income—as opposed to “earned” income from jobs—and set into practice preferential tax rates for long-term capital gains that are hotly debated to this day. This historical review explores how voices in favor of preferential rates were arguing on behalf of greater market liquidity and incentive for investment activity. Learn more about the real history of capital gains tax rates here.

In 2001, the government passed an act to completely repeal the tax. It was overturned in 2010. In 2017, the government increased the exemption threshold so fewer people would have to pay into the tax. In 2025, the exemption threshold was permanently set to $15M.

In 1980, a steady middle-class job paid roughly $13,000 to $16,000 a year, according to Bureau of Labor Statistics data. That income comfortably supported a household on one paycheck. The average full-time worker today, who makes $68K per year often cannot afford to support a household without a second income.

From July 1 to July 7, 2024, Pew Research Center conducted a survey of 9,424 adults to gauge the public's attitudes about the federal government, including government agencies and departments. Of 13 agencies, 10 had net favorable ratings of 15 percentage points or more. Topping the list were the National Park Service (76% favorable), the US Postal Service (72%) and NASA (67%).

In the early 1900s, 30% to 40% of government tax revenue came from liquor, wine, and beer, a reliance that made Prohibition seem like a fiscal impossibility. But the passage of the federal income tax in 1913 changed the calculus, which helped allow the government to ban alcohol production and sales.

For many, filing taxes can be complicated and overwhelming. Some argue that the tax system obscures certain aspects of the US tax code, making it difficult for taxpayers to accurately assess potential reforms.

Some states had higher shares of no-income households than others: West Virginia, for instance, had a national high of 34% of households with no income. These states tend to have older populations, higher rates of disability, and lower median incomes overall. In such contexts, a larger portion of households rely on non-earned income sources or report no income during the survey period.

In 2024, a single filer making anywhere between $200,001 and $243,725 per year would pay a 15% tax on long-term capital gains. But when it comes to short-term capital gains, they’d be taxed at the same rate as their regular income, which, in their case, is 32%.

Death taxes date back to 700 BCE and were used in Ancient Rome and Ancient Egypt. In the US, they've been used to finance wars since the Civil War, and have been levied on both the estate and beneficiary. The estate tax created during WWI to help finance war efforts is still in effect today.

When looking at countries with the highest average wealth per person, the United States comes in at number three (with $564,862 per person). But the US doesn't even make the top 10 when looking at the median wealth per person rather than the average, which is perhaps a more accurate version of the data. Explore the numbers here.

In 2025, about half of Americans were able to file taxes directly with the IRS for free. It was the second year of the agency's new program, which cuts out intermediaries. Though tax preparation has been free for many Americans, critics say tax companies upsell customers.

Pay transparency—once considered taboo—is gaining momentum. Despite being legally protected since 1935, open salary discussions have only recently become more common, especially among younger workers. This overview explores how cultural norms, economic shifts, and new state laws are reshaping the conversation around what we earn.

In 2017, the federal government passed a tax bill that raised the estate tax threshold for individuals and married couples. However, this exemption was temporary and is set to expire at the end of 2025. This Bloomberg Tax podcast episode explains what wealthy individuals are doing to protect their estates before the tax change. Listen here.

Since the modern federal estate tax was implemented, people have felt strongly about whether or not to keep it. Much of the debate boils down to equality: Proponents say the tax creates better income equality between the rich and poor, while opponents say it's an inequitable tax only placed on the wealthy.

That’s because while Social Security benefits increase with wages and inflation, the income limits for taxing those benefits stay the same and don’t adjust over time.