Here's a mental image that might help. Think of a football field, 1000 typical Americans, and some big stacks of money in small bills. Specifically, think of $1 and $5 shuffled together and piled up so that each pile contains about equal numbers of $1's and $5's. If I did the math right (they say a US bill is 0.043" thick) then a money stack one foot tall is worth about $10k - so the football field is $3M long and $1.6M wide, I'm about $57k tall, and my waist size used to be about $30k (but with my diet, I lost about $1600 around the middle).
Now to visualize income distribution, let's take those 1000 typical Americans, and let them walk down the gridiron like this: start at one goal line, and for every $10k of yearly income, walk one foot toward the other end zone...so if you make $90k/year, e.g., you'll end up on the three-yard line, and if you make $300k/year, you'll end up on the 10. Subject to that rule, space everyone out as much as you can.
The first 900 of those 1000 people will end up somewhere before the 4 yard line, because about 90% of Americans make about $120k or less.
Another 90 people will end up between the 4 yard line and the 8 yard line - that is, they make between $120k and $240k per year.
Another 9 people will end up between the 8 yard line at the 20 - they make between $240k and $600k per year.
That accounts for 999 out of 1000 people, but this is America, land of Bill Gates and Warren Buffett - so we're not done yet. The last guy will stand, on average, at the 94 yard line - with an average income of $2.8M per year. Remember this is income, not life savings.
Now, for the tax cuts. Let's start with McCain's. EIn his plan, everyone gets a tax cut, and we'll hand it out as stacks of money. McCain has a stack about 9 feet high to be shared by the first 900 people; a stack about 5 feet high to be shared by the next 90 people; another 9.5 foot stack to be shared by the next 9 people; and a final stack about 6.5 feet high - about the height of Ben Rothlisberger - that goes to that one lonely old man (surely, he's old?) down on the 94 yard line.
Above is a picture I drew of this...you can click to zoom in.
This is approximate, and loses some detail - which maybe I'll get to in another post - but it illustrates the main properties of McCain's plan: there is an extremely long tail in income distribution in the US, and as a consequence, an extremely long tail of tax-cut returns. If you imagine the money stacks are all the same (which is order-of-magnitude correct), then
- For the bottom 90%, the per-person tax cut is about 1/10 that of people in the 90-99% bracket.
- For the 90-99% partition, the per-person tax cut is about 1/10 that of people in the 99-99.9% bracket.
- For the 99-99.9% partition, the per-person tax cut is about 1/10 that of people in the top one-tenth of one percent.