First off, I used the numbers to demonstrate percentage of income. There was no intention or effort made to make the numbers match actual percentages because we don't know state tax rates, deductions or anything.
We do know that most states have some form of sales taxes, and everyone pays property taxes. For renters, the property taxes are factored into their rent.
So even if the person with $20,000 in income pays little or no federal tax, they still pay property taxes, sales taxes, gas taxes, etc.
The guy with the $1,000,000 income has more deductions and ways of reducing his taxes. He gets to deduct his mortgage. His car is leased or owned by his company, and likely tax deductible, as are the golf club memberships.
My friends had a RV business. They worked long hours, often late into the night, during the season. When they picked up their financial statements for the year, their company had made $100,000, or $50,000 each.
My friend said she couldn't believe they had worked that hard for so little but then she thought about it. Their house and business were all on the same property so all of their expenses for the property were deductible, as were both their vehicles, and even her show horses (they sold horse trailers so the horses promoted the trailers).
So they paid tax on $50,000 each, after deducting over $150,000 in expenses they would have been paying out of net income if her husband had worked for someone else.
So even if the person with $20,000 in income pays little or no federal tax, they still pay property taxes, sales taxes, gas taxes, etc.
Even in idiotic states like California, sales taxes peak at about 10%.
A person with $20,000 in income probably doesn't own a home.
State and Federal gas taxes add up to about 49 cents a gallon, on average.
About 16%, currently.
They're still paying a much, much lower rate than those mean rich guys.