I heard a lot of news about ‘tea parties’ going on yesterday. If you don’t know, tea parties are supposed to mimic the Boston Tea Party, where New Englanders complained that they were paying tax, but had no say in government, i.e. taxation without representation.
That got me wondering why people would be participating in tea parties today. Nearly everyone in the U.S. has representation, so that can’t be it. From the Financial Times
The protests are focused on Mr Obama’s economic recovery efforts and $3,600bn (£2,400bn, 2,700bn) federal budget, which critics portray as “big government” measures that will pile debt on future generations.
Nothing about taxation directly there, but these tea parties are scheduled for April 15th (the deadline to file your US individual tax return). So does it have something to do with taxes or not? If you want to protest government spending as opposed to taxation, don’t have a tea party and don’t do it on April 15th. If you want to protest taxation, well, that got me curious.
I assumed that the US has the lowest taxes in its modern history. I knew that the first tax rates in our history would be really small, so my definition of modern history is, say, after the depression. The Tax Foundation has the historical numbers and even an Excel download. Unfortunately the data isn’t normalized, so I had to do some manipulating.
The moral is, don’t protest taxes when taxes are low (unless you think they should be higher).
I really have to thank Jon Peltier for his timely post about Callout Label Error Bars. I changed all of the years (four digit integers) into dates using
=DATE(YEAR(A2),1,1). I wanted the x-axis to be a date, so I made every year January 1st. Next, I found the maximum marginal tax rate for that year for the married-filing-jointly filing status. I guessed that MFJ is the most typical filing status. Then I created an X-Y scatter chart with a big purple line.
For the error bar callouts, I used this range.
I started with .2 error bars for everything, then manually adjusted them to make them look nice. The formula in F2 is
=VLOOKUP(E2,$A$2:$B$98,2)-G2. It finds the rate for the date in question and subtracts the error bar value. I had to round all the historical dates to the nearest January 1st so that the error bars weren’t out in space.
The workbook isn’t pretty, but you’re welcome to download taxgraph.xls.zip.