The wealthiest one percent of households – those with an annual income of at least $419,000 a year – pay half the tax rate of households earning less than $18,000, a new report by the Institute on Taxation and Economic Policy (ITEP) shows. Who Pays? A Distributional Analysis of the Tax Systems in All 50 States, which examines tax rates at the state and local levels, concludes: the lower one’s income, the higher one’s overall effective (actual) state and local tax rate.