I have written about understanding income taxes before, using the "tax receipt" idea from Third Wave. Here is another good example from the WSJ 11/6/10 (http://online.wsj.com/article/SB10001424052748704506404575592900454547226.html?KEYWORDS=laura+saunders). As we discussed last Thursday, all of the expenditures below SS, Medicare/Medicaid, interest on debt, and the military (called "non-military discretionary spending) only account for 17% of spending. If you cancellled them all, you would barely cover 1/2 of this year's deficit.
This is a good place to note that there are 7 different ways that income is taxed at the federal level: income from work (to which 3 different tax schemes are applied: federal income tax, Social Security, and Medicare), income from interest, income from dividends, income from investments and then all of these combined under another tax scheme, the Alternate Minimum Tax.
