Trusts pay taxes on income just like individual taxpayers do, whether it's investment income such as dividends, interest and capital gains, or business income, such as rental income on real estate owned by the trust. Of course, trusts don't contain earned income from work, so they don't pay Social Security taxes.
However, there are two major differences between how income of humans and trusts are taxed.
The first is that the tax rates for trusts are significantly compressed as compared to those for individuals. For instance, the top rate of 37 percent kicks in at $523,601 of income for individuals ($628,301 for married couples filing jointly) and at $13,050 for trusts. Here are the rates for the 2021 tax year: