Some states don't have income tax, though, IIRC.

Correct. For example, Texas does not have a state income tax.

I’m afraid also that Bitt is leaving out a big portion of the tax system here with regards to income tax: credits and deductions. Certain activities or situations allow people to pay less income tax at the end of the year and so two people with the same salaries can end up with drastically different bottom line payments. Marital status, number of dependents, giving to the church, loan interest, and everything else other the sun can cause you to play less in taxes than the simple percentage everyone has to pay.

While this is nice and all, it ends up making the whole process horribly complicated to the point that it is ridiculous for me to actually try and fill out all of the forms myself. I hire someone to do my taxes for the simple fact that I'm afraid of making some silly mistake and getting the IRS after me (which will happen if you don’t fill it all out exactly right). So there are professionals who prepare tax forms for people, and some are better than others (for example, I ended up owing 2K one year by one accountant, took my information to a second and ended up only paying 1K). The net effect of this is that the amount of taxes you pay can be drastically affected by who is preparing the forms, and IMHO that just isn’t right. But then again, I don’t know a better way do to it. If we want to use tax break incentives for certain activities then I guess we’re stuck with a complicated tax code and the people with the best accountants getting the best breaks.