Taxes in perspective

With our burgeoning deficit, we will certainly see a number of tax changes over the next decade.  I offer the following graphs and articles to provide some perspective on the matter.

I found this fascinating.  While the percentage of tax revenue from income taxes has stayed relatively constant over the last 60 years, there has been a dramatic shift from corporate and excise taxes towards payroll taxes.  My guess is that in the next 10 years the US will seriously considering adding a national sales tax or VAT tax similar to almost every other developed country.  You can already read some musings going in this direction.

The other trend that is occurring is a widening of the Gini coefficient which is a measure of the distance between the rich and poor in a country.  When this number is low their tend to be high social cohesion and when it is high, the potential for domestic strife increases.  From 1944 to 1984 you can see the US had a significantly lower Gini coefficient and hence a much stronger middle class.  With it now steadily creeping upward over the last 25 years and the recent anger being built up against the bankers, I think we will start to see marginal rates for the top income tax bracket go significantly higher.  I wouldn’t be surprised if we see a top rate of 50% in the next 10 years.