equitable income tax presentation

Equitable Income Tax

by Dan Nielsen

Statement of Purpose

To inspire more equitable policies which encourage fair incentives and rewards,

job creation and economic development.

• Background

• Proposed Ideas

• Tax Comparison (Current and Proposed)

• Health Care Revenue Plan

• Tax Comparison (Including Health Care)

• Conclusions

Contents

Background

• The US has an increasing wealth disparity and national debt.

• The top 1% earn up to 10,000 times median income and up to 1,000 times the income of doctors and the President.

• The top income tax bracket has been as high as 92% (1951-1952) and as low as 24% (1928).

• The first (bottom) income tax bracket has been as high as 23% (1943-1944) and as low as 0% (1923).

United States Internal Revenue Service and Census Bureau

Chart 1. US debt, debt as % of GDP, first and top tax brackets (1910 – present).

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130

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1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 2010 2020

Firs

t/To

p T

ax B

rack

ets

(%)

Deb

t as

% o

f G

DP

US

De

bt

($Tr

illio

n)

Year

US Debt ($Trillion)

Debt as % of GDP

Top Tax Bracket (%)

First Tax Bracket (%)

Suggestions Towards Inclusive Capitalism

• Federal income tax of 10% up to median income ($27,500).

• Above median income, federal income tax increases 10% each 500% increase in income and is capped at 49% tax:

Federal income tax = 6.213 • ln(income) + [-6.213 • ln(median income) + 10]

• Combine capital gains and all other sources of revenue as personal income (taxed 10 – 49% as shown above).

• Lower business tax to a flat rate of 20%.

Proposed Ideas

Current and Proposed Tax Comparison

Earned Income Multiple of US Tax Multiple of Proposed Tax Multiple of Proposed

Income Percentile Median Income Federal Median Income Federal Median Income Change

$ % Pre-tax % After Tax % After Tax %

12,300 25 0.45 11.6 0.5 10 0.45 -14

27,500 50 1.0 13.5 1.0 10 1.0 -26

56,100 75 2.0 18.2 1.9 14.4 1.9 -21

138,000 94 5.0 23.4 4.4 20.0 4.5 -14

275,000 98.3 10 27.6 8.4 24.3 8.4 -12

408,000 99.0 15 29.5 12 26.8 12 -9

1,110,000 99.8 40 33.0 31 33.0 30 0

1,660,000 99.9 60 33.7 46 35.5 43 5

2,750,000 99.94 100 34.2 76 38.6 68 13

27,500,000 99.999 1,000 34.9 752 49.0 567 40

275,000,000 >99.9999 10,000 35.0 7,515 49.0 5,667 40

Chart 2. Federal income tax and after tax income for bottom 75% Americans.

0

10,000

20,000

30,000

40,000

50,000

0

5

10

15

20

25

0 40,000

Aft

er T

ax In

com

e (

$)

Fed

eral

Inco

me

Tax

(%)

Adjusted Gross Income ($)

% Income Taxed (Current)

% Income Taxed (Proposed)

After Tax Income (Current)

After Tax Income (Proposed)

ThirdQuarter

(50 - 75%)

Second Quarter

(25 - 50%)

Bottom Quarter(0 - 25%)

56,100 (75% income)

–

12,300 27,500

(25% income)

– –

Chart 3. Federal income tax and after tax income for bottom 99% Americans.

0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

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0 150,000 300,000

Aft

er T

ax In

com

e ($

)

Fed

eral

Inco

me

Tax

(%)






Near Top Quarter (75 - 99%)

Third

Quarter

5

0

I 7

5%

Second

Quarter

2

5I

50%

Bottom

Quarter

0

I25

%

408,000 (99% income)

–

56,100

–

(75% income)

Chart 4. Federal income tax and after tax income for bottom 99.9% Americans.

0

300,000

600,000

900,000

1,200,000

0

10

20

30

40

0 1,660,000

Aft

er T

ax In

com

e (

$)

Fed

eral

Inco

me

Tax

(%)






99.8% Income

Bo

tt

om

7

5%

Near Top 24.9% (75 - 99.9%)

(99.9% income)1,110,000408,000

– –

(99% income)


0

3,000,000

6,000,000

9,000,000

12,000,000

15,000,000

18,000,000

0

10

20

30

40

50

60

0 10,000,000 20,000,000

Aft

er T

ax In

com

e ($

)

Fed

eral

Inco

me

Tax

(%)






99.8% Income

Near Top 0.1% (99.9 - 99.999%)

–

(99.999% income)

1,660,000(99.9% income)

–


-30

-20

-10

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-30

-20

-10

0

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1,000 10,000 100,000 1,000,000 10,000,000 100,000,000

% In

cre

ase

Fed

eral

Inco

me

Tax

(%)




% Increase

99.8% Income

Top Quarter(75 - 99.9999%)

Third

Qua

rter

50

I

75%

Bottom Quarter

(0 - 25%)

Second

Quar

ter

25

I

50%

(99.9999% income)

Health Care Revenue Plan

• All US citizens pay 10% of income for national health care.

• Health care benefits increase with higher health care premiums.

• Eliminate incentives for unnecessary procedures and costs.

• Create incentives for efficiency, cost cutting and preventative health.

• Make US businesses more competitive internationally by removing employee health care costs.


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1,000 10,000 100,000 1,000,000 10,000,000 100,000,000

% In

cre

ase

Incl

ud

ing

He

alth

Car

e

Fed

eral

Inco

me

Tax

Incl

ud

ing

Hea

lth

Car

e (%

)




% Increase (Including Health Care)

Top Quarter (75 - 99.9999%)

Thi

rd

Quar

ter

50

I

75

%

Bottom Quarter

(0 - 25%)

Sec

ond

Quar

ter

25

I

5

0%

(99.9999% income)

Conclusions

• Combine capital gains and all other sources of revenue as personal income taxed 10% up to median income, then increasing 10% each 500% increase in income and capped at 49% tax:

Federal income tax = 6.213 • ln(income) + [-6.213 • ln(median income) + 10]

• Create conditions for job growth by removing health care costs and lowering business tax to a flat rate of 20%.

• All US citizens pay 10% of income for national health care.

• A more equitable distribution of wealth will increase consumer demand, worker motivation, innovation, human health and economic growth.

• Increased economic opportunity will minimize crime and welfare.

equitable income tax presentation

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