From: weverka@csn.org (Robert T. Weverka)
Subject: USA tax rate on poor > tax rate rate on rich
Organization: University of Colorado, Boulder
Distribution: usa
Date: Fri, 10 Apr 1992 13:04:33 GMT

Here is a graph of incremental tax rates for incomes from $0 to $150,000.
Poor people pay over 40% tax rate.  The current system in the USA is 
regressive.
marginal rate-total tax versus gross income.  This chart assumes the net 
income is the gross income minus $8600 in exemptions (family of four) and 
$5700 standard deduction.

     #
     #      ####            ###
 0.4 #      #  #            # #
     #      #  #            # #
     #      #  #            # #
     #      #  #            # #
     #      #  #            # #                   ##############
     #      #  #            # #####################            ############
 0.3 #      #  ##############
     #    ###
     #    #
     #    #
     #    #
     #    #
 0.2 #    #
     #    #
     #  ###
     #  #
     #  #
 0.1 #  #
     #  #
     #  #
     #  #
     #  #
   ########################################################################

     0      20000     40000    60000    80000    100000   120000   140000
This comes from the IRS tax tables.  I have added up each of the taxes 
that contribute to the majority of peoples taxes.  The components of this 
total follow.

The following are plots of the marginal tax rates for each of the 
components of the federal tax bill-Social security tax, earned income credit,
and income tax.  The marginal rate for the total federal tax follows these 
three.  Social Security tax is the dominant component of federal taxes for 
middle and low income wage earners.  This regressive tax makes the current 
system regressive as a whole.  The effect of loop-holes, available only to 
people in greater income brackets, is not included in these plots.  These 
loop-holes make the system even more regressive.

marginal rate-Social Security.  This tax is on gross income.

       #
       #########################
  0.15 #                       #
       #                       #
 0.125 #                       #
       #                       #
   0.1 #                       #
       #                       #
 0.075 #                       #
       #                       #
  0.05 #                       #
       #                       ##################################
 0.025 #                                                        #
       #                                                        #
     ######################################################################
       #
              20000    40000    60000    80000   100000    120000   140000
                        INCOME->

marginal rate-Federal Income Tax.  This tax is on net income after 
deductions and exemptions.

       #                                    ###############################
   0.3 #                                    #
       #                                    #
       #                                    #
 0.275 #              #######################
       #              #
       #              #
  0.25 #              #
       #              #
       #              #
 0.225 #              #
       #              #
       #        #     #  #        #        #        #         #        #
     ######################################################################
       #              #
       #      20000   #40000    60000    80000   100000    120000   140000
 0.175 #              #              INCOME->
       #              #
       #              #
  0.15 ################

Marginal rate-Earned Income Credit.  This tax is on gross income.
       #    ######
       #    #    #
   0.1 #    #    #
       #    #    #
       #    #    #
  0.05 #    #    #
       #    #    #
       #    #    #
     ######################################################################
       #  #   20000    40000    60000    80000   100000    120000   140000
       #  #
 -0.05 #  #              INCOME->
       #  #
       #  #
  -0.1 #  #
       #  #
       #  #
 -0.15 #  #
       ####

A flat tax makes sense because it no longer puts the poor in
a higher bracket than the rich.
-Ted Weverka