In the U.S. federal income tax system, the highest income tax bracket (the 37% marginal tax rate) pays the most in taxes, both in terms of the highest average tax rate and the largest share of overall income taxes collected.
Highest Marginal Tax Rate
The U.S. uses a progressive income tax system with seven different marginal tax rates: 10%, 12%, 22%, 24%, 32%, 35%, and 37%. The 37% tax bracket is the top marginal rate, meaning that any taxable income falling within this bracket is subject to the highest possible tax rate.
For the 2025 tax year (taxes due in April 2026), the income thresholds for the 37% marginal tax rate are:
- Single filers: Taxable income over $640,600.
- Married couples filing jointly: Taxable income over $731,200.
Due to the progressive nature of the tax code, higher-income taxpayers pay a disproportionately larger share of the total federal income taxes collected.
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The top 1% of earners (those with the highest incomes) paid approximately 40.4% of all federal income taxes in 2022, which is the most recent data available.
The top 10% of earners paid about 72% of the total, while the bottom 50% paid only about 3%.
Key Term
Marginal Tax Rate vs. Average Tax Rate: The 37% is the marginal rate (the rate paid on the last dollar of income within that bracket).
The average or effective tax rate (total tax paid divided by total income) for the top earners is lower than 37% because their income is taxed across all the lower brackets as well. However, the top 1% still face the highest average tax rate, at around 26%
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