2) After the recent tax cut, the average tax rate and amount paid by a single person having bracket ending taxable income for 2003
                           is appears below.

Analyzing 2003 Tax Rates for a Single Filer
Taxable Income	Marginal Rate	Bracket Taxes Paid	Average Rate Calculation Add previous bracket total to bracket this total and divide by bracket upper limit.
0 to 7,000	10	.1(7,000)  = 700	700/7,000 = .10 is average rate on $7,000.
7,001 to 28,400	15	.15(28,400-7,000) =  3,210	(700 + 3,210) = 3,910/28,400 = .138 is the average rate on 28,400.
28,401 to 68,800	25	.25(68,800-28,400) = 10,100	(3,910 + 10,100) = 14,010/68,800 = .204  is the average rate on 68,800.
68,801 to 143,500	28	.28(143,500-68,800) = 20,916	(14,010 + 20,916 = 34,926/143,500 = .243  is the average rate on 143,500.
143,501 to 311,950	33	.33(311,950-143,500) = 55,589	(34,926 + 55,589) = 90,515/ 311,950 = .290 is the average rate on 311,950.
311951 and over	35

                    3. For an historical view of tax rates which peaked at 88% in 1942-43 View CTJ Data Sheet as HTML .

           2. Payroll Taxes: premiums paid on compulsory insurance plans  
               a. social security and Medicare (both employer and employee pay)  
               b. unemployment taxes (just employer pays)
           3. Corporate Income Taxes
           4. Excise Taxes are a sales tax on items such as jewelry, tobacco, and liquor.
           5. Licenses and Fees

2. State and local governments have mandatory balanced budget laws making the accumulation of debt difficult

  V. Taxation philosophies
      A. Ability to pay
           1. Those with the ability (income or wealth), pay more.
           2. Examples
               a. Income tax
               b. Sales tax
               c. Estate taxes
       B. Benefit received (User taxes)
           1. Those who derive a benefit from some government action pay for said activity.
           2. Examples
              a. Gasoline taxes are used to improve roads.
              b. Social security taxes are used to provide retirement and other benefits for participants.

 VI. Types of tax rates
        A. Progressive
            1. Tax rate increases as income increases
            2. Tax rate decreases as income decreases
            3. Those earning higher income pay a higher average tax rate.
            4. Example: Federal Income Tax                
                Note: Moving into a higher tax bracket does not result in your paying a higher rate on lower bracket earnings.
       B. Proportional
           1. Tax rate as percentage stays the same.
           2. Examples: Social Security taxes are proportional up to the maximum income level of about $76,200 because both 
               employer and employee pay a constant rate of about 8%, but then the tax is regressive as the rate drops to zero
      C. Regressive 
          1. Amount paid divided by income drops as income increases.
          2. Happens one of two ways
              a. Rate drops as income increases (FICA after about $76,200 in 2000) 
              b. Amount of tax is constant so at higher incomes, the effective tax rate is lower (excise taxes on cigarettes, liquor, etc.)

 VII. Shifting the tax incidence
         A. Passing the burden of taxes onto others (consumers ultimately pay)
         B. Businesses and professionals try to do this
         C. The consumer bears most of the tax burden in a market economy

VIII. Major Categories of Federal Income and Outlays for Fiscal Year 1999 and 2002
         A. Reported by IRS in form 1040 after the Tax Rates Schedules.
         B. Income

C. Outlays