Taxes Are Due: Which Generation Pays the Most Tax in the U.S.?

2 5 minutes read

Taxes Are Due: Which Generation Pays the Most Tax in the U.S.?

Tax Day 2025 has arrived (taxes are due before the clock strikes midnight if you haven’t filed), and it’s probably safe to say that most people don’t like paying taxes. Many feel they are paying too much.

A Gallup poll revealed that 60% of U.S. taxpayers believe their federal income tax burden is too high. In addition, a new 2025 survey indicates that just over 50% of respondents think income taxes are unfair.

So, as we approach the end of the 2025 tax season — the federal tax deadline is April 15 for most (though many have IRS deadline extensions) — it’s a good time to consider how the tax burden in the United States is distributed.

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Recent studies provide insights into which age groups contribute the most to the nation’s tax revenue. So, which generation pays the most in taxes? Read on for the details.

The main contributors: 45-55 year-olds pay nearly 30% of all income taxes

According to an analysis by the Tax Foundation, U.S. taxpayers ages 45 to 55 bear the largest share of the income tax burden.

This age group accounts for about 29% of the total income taxes paid to the federal government.

The study, which examined IRS data, indicates that individuals age 45 to 55 pay the most in absolute terms and experience the highest effective tax rates. (IRS data from 2024 lack age-specific shares but generally confirm peak tax rates around age 55.)

Tax rates by age data from the National Bureau of Economic Research (NBER) corroborate those findings.

The NBER model shows that those in their mid-40s to mid-50s face the highest (and similar) average tax rates:

The 45-50 age group faces an average tax rate of 17.2%
The 50-55 group faces a slightly higher rate of 17.6%

Why does this age group pay so much? The answer could lie in their earnings.

The Tax Foundation’s research revealed that people aged 45 to 55 are typically in their peak earning years, accounting for 26% of the nation’s total adjusted gross income (AGI). (That’s despite making up only 18% of all federal income tax returns.)

And, as if high taxes weren’t enough, Individuals in their late 40s to mid-50s often face additional financial burdens as the “sandwich generation.”

This group often simultaneously supports aging parents and adult children while managing their own mid-career and economic pressures.

Tax burden by age: What about Gen Z taxes and retirees?

The next highest tax-paying group is those aged 55 to 65, who pay about 23% of total income taxes. The two age brackets combined — 45 to 65 — contribute over half of all taxes collected in the U.S.

The Tax Foundation’s study on total tax burden, including federal, state, and local taxes, provides more insights:

Households headed by individuals aged 45 to 54 face the highest average annual tax bill of $36,140.
Of this amount, $24,149 went to the federal government and $11,991 to state and local authorities.
The tax burden on the 45-54 age group is 4.3 times larger than that of those 75 and older, even though their average household incomes are only about 2.6 times as large.

At the other end of the spectrum, younger people contribute significantly less to the overall tax burden.

Data show that those under age 35 account for only 11% of total taxes paid. That’s despite making up 35% of all tax filers. Studies show that the lower burden is primarily due to lower incomes and a potentially higher proportion of non-payers in that age group.

For older adults, data suggest the tax burden decreases as individuals approach and enter retirement.

The Tax Foundation’s study shows that for those older than 60, median total tax rates dropped below 5% by age 68 and below 2% by age 74.

That decline is reportedly mainly due to the shift from earned income to retirement income sources, some of which are exempt from certain taxes.

A study by the Pew Charitable Trusts highlights how the aging population will likely shift tax burdens in the coming years. As the proportion of retirees grows, that could increase the relative burden on younger workers.

Do you pay too much tax?

Many feel the U.S. tax system disproportionately benefits the wealthy and corporations and overburdens “regular workers.” Gallup’s surveys reveal that 70% of respondents believe corporations contribute too little, a view shared across political affiliations.

Similarly, nearly 60% argue that high earners don’t pay their fair share. At the same time, 58% say lower-income households shoulder too much, highlighting concerns about unequal burdens on working families.

The situation is complex: While data show that the top 1% account for nearly half of federal income tax revenue, billionaires often can minimize income taxes through strategies like untaxed asset growth.

(Wealthy individuals and corporations frequently leverage tax code advantages to reduce income tax liabilities, while their wealth, often tied to stocks and assets, grows largely untaxed.)

For instance, a pandemic-era ProPublica analysis found that some ultra-wealthy individuals paid no federal income tax in certain years despite massive wealth gains, relying on loopholes for investments and corporate holdings.
Meanwhile, other groups emphasize that workers with middle and lower incomes face higher effective rates on wages due to payroll and state taxes, which consume a larger portion of their earnings.

So, even if the top 1% technically contribute more in income taxes overall, everyday workers pay higher rates on their salaries.

Paying Taxes: What you can do

If you feel you are paying too much tax, take advantage of all tax deductions and credits you’re eligible for and consider the following strategies to potentially lower your tax bill next year.

Additionally, consult a qualified and trusted tax professional or certified financial planner who can customize an approach based on your situation.

Maximize Retirement Contributions: For 2025 (returns you’ll file in early 2026), you can contribute up to $23,500 to your 401(k) if you’re under 50. For those age 50–59 or 64+, the catch-up is $7,500 (total $31,000).

A new “super catch-up” rule allows those 60–63 to contribute an additional $11,250, totaling $34,750 (if your plan permits). Those contributions can reduce your taxable income.

Roth Conversions: If you’re in a lower tax bracket now but expect to be in a higher one in retirement, converting some of your traditional IRA to a Roth IRA could save you money.

Health Savings Accounts: HSAs allow tax-deductible contributions that reduce taxable income, offer tax-free growth on investments, and enable tax-free withdrawals for qualified medical expenses. 2025 Limits: $4,300 (self-only) / $8,550 (family), with a $1,000 catch-up for those 55+.

FSAs: Flexible Spending Accounts allow you to use pre-tax dollars for healthcare or childcare costs and lower your taxable income at the same time.

Charitable Donations: This might include giving stocks/funds directly to nonprofits and using dedicated giving accounts for upfront deductions. However, to claim charitable donations, you have to itemize deductions.

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