You may ask Why this Post is important to study; I remand you to the Chart. Let me put it another way; the right hand side should also have an axis, scaled not from zero precisely, but showing the percentage of each Income level paying each form of Tax. Everyone knows this would make the Chart a little dense on the Right side, but the Chart can be expanded as needed, due to the miracles of technology. Such documentation though, even in Chart form, might produce some misgivings amidst the sad Taxpayers at the high Income level. Remember, kids, this is the way you find out the bad News about the economy–devising the correct method to analyze economic data.
There is a lady who thinks there is some Common Ground over which Democrats and Republicans can agree about Taxes and Expenditures. Republicans care not either for marginal tax rates or average tax rates, they only want no additional tax revenues coming from themselves. Democrats want to gouge the Wealthy; knowing that the Poor are safe, one cannot get blood from a stone, and the Poor and Middle Class are on some stony ground. No one talks about What has actually to be done to balance the budget in all its aspects. I will give a Roadmap:
1) Social Security and Medicare have to be separated, with Medicare given its own wondrous Tax rate and base; first Step in the Trip to a national health care system. Both Democrats and Republicans know what a pain this will be to the Pocketbook.
2) the Civil Service–hopefully State and Local as well as federal–needs to be split in two, One-Half working Monday, Tuesday, Wed., and One-Half working Thurs., Friday, Sat. Everyone would work a 12-hour Shift three day a Week; Everyone would get only 2-Weeks of paid Vacation after working at least 50 Weeks, and Congress will determine a Unit Pension benefit to be paid monthly for all Civil Services classifications. No Civil Service personnel will be employed more than 20 Working Years per lifetime, and any further Service to the nation must be paid out of potential Private charity contributions.
3) Income will be split in $10,000 Units for Tax purposes, and there be passed by Congress an Alternate Minimum Income Tax in a progressive list which must be paid for each segment. The AMT yearly Fix will become a thing of the Past, but any form of Employment taxation will accrue to the fulfillment of the segmented AMT. By the way, Corporate Income, Capital Gains, Inheritance, and Royalties and Rents will all be considered ordinary Income and taxed at the same rate.
4) Congress cannot just Vote in support of a federal program or project; they must determine How much they are willing to pay for that project every year, and the project in question let out for Bidding. Any Bid is considered sacrosanct, and the Bidder will be compelled under law to supply the Contract under the terms of the Contract.
5) Congress must drop any such project from the current fiscal year, if no Bid has been advanced under the Contract passage.
Does it seem harsh? It is meant to be! lgl