Infographic: How the U.S. Tax System Works

Tax myth: Low-income earners don’t pay any federal taxes.

One issue that most lawmakers and voters agree on is that our tax system needs reform. It is confusing, complex, and favors some individuals and economic activities over others. Exactly how to revise the tax system, however, can be a hotly contested issue — which is further complicated by the fact that there are common misconceptions about how the current system works.

Before we can begin to assess the value of specific proposals, it helps to get the big picture on how the system works. Check out the infographic below for an overview of the system, and then test how much you have learned with our tax quiz.

How the U.S. Tax System Works

How the U.S. Tax System Works, courtesy of Peter G. Peterson Foundation

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