Chart of the Week: Debt'o'Rama II

Why is the United States in so much debt? One answer, and there is more than one, is that the federal government does not collect as much in taxes as it did in the past.  Of course revenues go down in a "great contraction", but marginal rates are also at historic lows:

[credit: Catherine Mulbrandon]

The gray line shows corporate marginal rates and green income marginal rates at lows not seen since the 1920's.  This graph from the NYT shows what rate each income quintile is paying for all taxes:

You do not need to be an economist to see the largest drop in tax rates are for the highest earning taxpayers. Who are these people? Here is a another chart from Ms. Mulbrandon @ visualizingeconomics.com:

They are the usual suspects: CEOs (black), celebrities (blue), and hedge fund managers (red) who make more than almost anybody else. Mitt Romney is in this class of the incredibly wealthy (>99.99%). His 2010 income tax return listed a total income of $21.7 million, mostly from capital gains taxed at a ridiculously low marginal rate of 15% [see chart, yellow line]. The overwhelming majority of Americans (98%) live in households making less than $250,000 annual income. The usual justification for this huge disparity in income is that the super rich make jobs; Romney uses this chestnut to explain his tenure at the takeover firm, Bain Capital. But this chart reveals that claim to be another lie:

Currently, the top marginal income tax rate is 35%. More jobs were created back in 50's and 60's when marginal rates exceeded 50%! When is the last time a comic, actor or professional athlete gave you a job? We already have government for the rich, so it's only one small step for man to government by the rich, of the rich.