35%39.6%

2.0%2.3%

0.9%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

2011, TOP STATUTORY RATE PRESIDENT'S TOP TAX RATE

NONDEDUCTIBLE MEDICARE TAX MEDICARE TAX ON WAGES/SALARY

PEP/PEASE PROVISIONS REINSTATED,2011 EXPIRATION OF 2001/2003 TAX RATES,2011

TOTAL = 44.8%

PRESIDENT’S TAX HIKES

SOURCE: IRS, PRESIDENT’S FY2012 BUDGET, HOUSE BUDGET COMMITTEE ESTIMATES

CHART 1

0%

20%

40%

60%

80%

100%

120%

BOTTOM 50% TOP 1% TOP 5% TOP 25% TOP 50%

BEFORE TAX RELIEF

AFTER TAX RELIEF

SOURCE: IRS

TAX CODE MORE PROGRESSIVE AFTER TAX RELIEFBREAKDOWN OF TAX BURDEN BY INCOME LEVEL – 2001 VS 2008

CHART 2

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005

TOP INCOME TAX BRACKET

TOTAL TAX REVENUE AS PERCENT OF GDP

INCOME TAX REVENUE AS PERCENT OF GDP

TAX REVENUES DO NOT CORRELATE WELL WITH TAX RATES

FISCAL YEAR

CHART 3

SOURCE: HERITAGE FOUNDATION

TAX REVENUES ARE HIGHLY CORRELATED WITH GDP

REAL 2006 GDP ($BILLIONS)

REAL 2006 TAX REVENUES

($BILLIONS)

1950 1960 1970 1980 1990 2000

$3,500

$7,000

$10,500

$14,000

$500

$1,000

$1,500

$2,000

$2,500

REAL TAX REVENUE

REAL GDP

CHART 4

SOURCE: HERITAGE FOUNDATION

10%

25%

35%

19%

47%

66%

25%

63%

88%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

LOWEST INDIVIDUAL RATE MIDDLE INDIVIDUAL RATE TOP/CORPORATE TAX RATE

2008

2050

2081

SOURCE: CBO

CHASING HIGHER SPENDING WITH TAXES(INCREASE IN TAX RATES NECESSARY TO KEEP PACE SPENDING)

CHART 5

10

20

30

40

50

60

70

80

1947 1957 1967 1977 1987 1997 2007 2017 2027 2037 2047 2057 2067 2077

SPENDING TAX REVENUE

Ch WE ARE IN A SPENDING-DRIVEN DEBT CRISISHISTORIC/PROJECTED SPENDING & REVENUE AS A PERCENTAGE OF THE ECONOMY

SOURCE: OFFICE OF MANAGEMENT AND BUDGET HISTORIC TABLES, CONGRESSIONAL BUDGET OFFICE; PROJECTIONS BASED ON THE CBO’S ALTERNATIVE FISCAL SCENARIO.

CHART 6

%

5%

10%

15%

20%

25%

30%

35%

40%

45%

JAPAN U.S. FRANCE SPAIN ITALY U.K. POLAND IRELANDSOURCE: ORGANIZATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT

CORPORATE INCOME TAX RATES

CHART 7

$0

$50,000

$100,000

$150,000

$200,000

$250,000

$300,000

BOTTOM 20% SECOND MIDDLE FOURTH TOP 20% TOP 1%

WHO BENEFITS FROM TAX LOOPHOLESAVERAGE PER PERSON BENEFIT BY CATEGORY OF EARNERS

SOURCE: TAX POLICY CENTER/IRS

CHART 8

SOCIAL SECURITY

MEDICAID & OTHER

HEALTH

MEDICARE

0%

5%

10%

15%

20%

25%

1970 1980 1990 2000 2010 2020 2030 2040 2050 2060 2070 2080

PROJECTED TAX REVENUE

SOURCE: CBO

WHAT DRIVES OUR DEBT?(GOVERNMENT SPENDING AS SHARE OF ECONOMY)

CHART 9

CHART 10