19 Income Tax Statistics to Open Your Eyes in 2022

It comes around on April 15, year after year.

It’s Tax Day!

Why is it so hard for Americans to meet the deadline?

Chances are, most people struggle to get things right. For many of them, filing their taxes feels like an advanced skill.

Meanwhile, others are familiar with the process but feel the taxes they pay are too high.

If you want to find out more about income taxes in America and get a sense of the overall taxpayer sentiment in the country, take a look at our list of the most important income tax statistics and facts.

Income Tax Statistics (Editor’s Pick):

  • In 2021, over 9% of the GDP of the United States came from income tax revenue.
  • 57.1% of US households didn’t pay individual income tax in 2021.
  • When asked about their opinion on the amount they have to pay in income taxes,  54% of American taxpayers said they think it’s too high.
  • In 2020, the state of California proposed raising the top state income tax rate to 16.8%
  • In 2021, Comoros was the country with the highest corporate income tax rate — 50%.

Income Tax Statistics and Facts: the US

How many tax brackets are there in the US? Is state income tax levied in all US states? How much does the U.S. government earn in income tax revenue?

Check out the most recent statistics on income taxes in the United States.

1. In 2021, income tax revenue accounted for 9.1% of the U.S. GDP.

(Source: Statista)

In 2021, US taxpayers contributed approximately $2.04 billion to the country’s GDP.  This amount represents a 1.4% increase from 2020, when income tax revenue accounted for 7.7% of the U.S. GDP.

2. In 2021, individual income taxes accounted for more than half of the total U.S. government revenue.

(Source: Statista)

Of the $4.03 trillion the U.S. government had in revenue in 2021, about $2.04 trillion came from individual income taxes. Meanwhile, corporate income taxes brought in about $372 billion.

3. In 2021, about 64.4% of filed tax returns and other forms were individual income tax returns.

(Source: IRS Data Book)

Of 167,915,264 income tax returns filed in 2021, most came from the state of California (over 20 million), followed by Texas (14.1 million), Florida (11.5 million), New York (10.3 million), and Pennsylvania (6.6 million)

4. Nine US states don’t have an income tax.

(Source: Tax Foundation)

Although they have to pay federal income tax, those who live in the following states are exempt from paying state income tax:

  • Alaska
  • Florida
  • Nevada
  • New Hampshire (the state does tax interest and dividends)
  • South Dakota
  • Tennessee
  • Texas
  • Washington (the state does levy a state capital gains tax in some cases)
  • Wyoming

5. Over 57% of American households paid no individual income tax in 2021, federal income tax statistics show.

(Source: Statista)

The majority of such households had a yearly income lower than $20,000. Unsurprisingly, most of those who did pay individual income tax in 2021 had an income of somewhere between $500,000 and $1,000,000.

6. In 2020, close to 61% of US households didn’t have to pay income tax.

(Source: Tax Policy Center)

About 107 million American households owed no income tax or received tax credits from the government in 2020. This is a 40% increase from 2019, when a bit over 75 million households paid no federal income taxes. As Tax Policy Center reports, the increased number of non-payers comes as a result of the impact the Covid-19 pandemic had on the whole country.

7. There are seven federal income tax brackets in the United States.

(Source: Nerd Wallet)

Although the minimum and maximum taxable income in each bracket is different every year, what stays the same is the rate at which income is taxed. In the United States, personal income can be taxed at 10, 12, 22, 24, 32, 35, or 37 percent.

US Tax Statistics: Taxpayers’ opinions

How do American taxpayers feel about paying taxes? Do they think cheating on taxes is that bad?

Let’s see what they had to say about their taxpaying experience.

8. Based on a survey by the College Investor, in 2020, almost half of respondents used tax software to file their taxes.

(Source: The College Investor)

When asked about how they prepared their tax return in 2020, 46% of respondents stated they used tax software. Meanwhile, 27% reported turning to CPAs and other in-person service providers for help, while 11% did it virtually. Finally, around 16% of respondents said they prepared for filing the old-fashioned way — using pen and paper.

When it comes to the tax software they used, TurboTax was the absolute winner:

Tax Software

9. The SCE Public Policy Survey from April 2022 shows that less than half of the respondents believe the average income tax rate is likely to increase.

(Source: New York Fed SCE Public Policy Survey)

This was the opinion of about 45.2% of respondents, while the majority of them (46.2%) stated they don’t think anything is likely to change. Meanwhile, only 7.9% of respondents believe the average income tax rate is likely to decrease.

10. In 2022, 54% of American taxpayers stated they felt that income taxes were too high.

(Source: Statista)

This percentage represents a 4% year-over-year increase in the number of taxpayers who are of this opinion. Meanwhile, 41% think that the amount paid in income taxes is ‘about right’, and 3% of taxpayers think it’s too low.

11. In 2021, 88% of taxpayers surveyed by the IRS stated they find it unacceptable to cheat on taxes.

(Source: IRS CTAS 2021 Executive Report)

As reported in the results of the 2021 Comprehensive Taxpayer Attitude Survey (CTAS), the vast majority of American taxpayers believe cheating on taxes is ‘not at all’ acceptable. In fact, 93% of respondents believe that paying exactly what they owe in taxes is their duty as American citizens. Moreover, 89% of surveyed taxpayers agree that those who cheat on their taxes should be held accountable.

12. In 2021, 66% of IRS-surveyed taxpayers stated they feel they can trust the IRS will help them understand their tax obligations.

(Source: IRS CTAS 2021 Executive Report)

Meanwhile, 14% of taxpayers feel the opposite way. Moreover, those aged 65 and above are the age group that least trusts the IRS to help them understand their tax obligations.

13. Taxpayers’ personal integrity is the main reason they report and pay taxes honestly, research shows.

(Source: IRS CTAS 2021 Executive Report)

IRS tax stats for the year 2021 show that 74% of surveyed taxpayers stated they are compliant because of their personal integrity. The second most common reason (50%) for taxpayers making honest tax payments is avoiding paying an IRS penalty.

California Income Tax Statistics

As the most populated US state with a high cost of living and the one with the most tax returns in the country, California deserves a thing or two to be said about it.

Let’s check out some income tax statistics and facts related to the Golden State.

14. California has nine tax brackets.

(Source: Bankrate)

Personal income in California can be taxed at the rate of 1%, 2%, 4%, 6%, 8%, 9.3%, 10.3%, 11.3%, and 12.3%.

15. In 2021, California was the number one state in terms of the collected amount of tax.

(Source: Statista)

With a total of $248.19 billion collected in tax revenue in 2021, California collected almost three times the tax revenue of New York, the next best state in terms of tax revenue.

16. In 2020, California proposed a bill to raise the top state income tax rate to 16.8%.

(Source: Forbes)

When you look at the fact that California is among the states with the most billionaires, this doesn’t come as a surprise. The bill failed to pass, but the state keeps trying to find a better way to tax the wealthy. In fact, in 2022, California proposed (for the third time) a bill to introduce a wealth tax. However, the state failed to go forward with the bill after missing a deadline.

Global Income Tax Statistics

What do income tax rates look like on a global scale? Which country’s income tax revenue makes up almost a third of its GDP?

Let’s check it out.

17. In 2021, the Ivory coast was the country with the highest personal income tax rate.

(Source: Trading Economics)

Based on data from Trading Economics, in 2021, the personal income tax rate in the Ivory Coast stood at 60%.

Other countries with a high personal income rate in 2021 include:

  • Finland – 56.95%
  • Japan – 55.97%
  • Denmark – 55.90%
  • Austria – 55.00%
  • Sweden – 52.90%
  • Aruba – 52.00%
  • Belgium – 50.00%
  • Israel – 50.00%
  • Slovenia – 50.00%

18. In 2021, Comoros was the country with the highest corporate income tax rate.

(Source: Tax Foundation)

Comparing income tax rates by country based on the Tax Foundation data, in 2021, Comoros had the highest corporate income tax rate — 50%.

Other countries with a high corporate income rate in 2021 include:

  • Puerto Rico – 37.5%
  • Suriname – 36.00%
  • Chad – 35.00%
  • Equatorial Guinea – 35.00%
  • Guinea – 35.00%
  • Iraq – 35.00%
  • Malta – 35.00%
  • Sudan – 35.00%
  • Zambia – 35.00%
  • Brazil – 34.00%

19. In 2020, taxes on income and profits accounted for nearly 30% of Denmark’s GDP.

(Source: OECD Revenue Statistics)

Denmark was the country with the highest income-tax-to-GDP-ratio in 2020 — it accounted for 29.9% of the country’s GDP.

Other countries with a high income-tax-to-GDP ratio in 2020 were:

  • Iceland: 18.3%
  • New Zealand: 17.8%
  • Canada: 17.1%
  • Australia: 16.4%
  • Belgium: 15.2%

A Brief Word to Conclude Our Tax Stats:

When the Tax Cuts and Jobs Act passed in December 2017, many things changed. However, based on NerdWallet’s survey, 28% of taxpayers had no idea what changes were made. Not only that, but about half of them didn’t even know which tax bracket they belonged to.

The changes that were made left many Americans confused and unsure of the economic future of the country. With the introduction of the act, individual and corporate income tax rates were lowered, which left more room for after-tax income and spending.

Still, the true results of this reform have yet to be seen.

ABOUT AUTHOR

Christo is a bachelor in Economics, but he found a passion for crafting web content. He sees SpendMeNot as an opportunity to create engaging articles and help readers make informed financial decisions.

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