To inspire more equitable policies which encourage fair incentives and rewards, job creation and economic development.

1. Equitable Income Tax
by Dan Nielsen

2. Statement of Purpose
To inspire more equitable policies
which encourage fair incentives and rewards,
job creation and economic development.

3. Contents
• Background
• Proposed Ideas
• Tax Comparison (Current and Proposed)
• Health Care Revenue Plan
• Tax Comparison (Including Health Care)
• Conclusions

4. 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

5. 26 130
US Debt ($Trillion)
24 120
Debt as % of GDP
First/Top Tax Brackets (%) Debt as % of GDP
22 110
Top Tax Bracket (%)
20 100
First Tax Bracket (%)
18 90
US Debt ($Trillion)
16 80
14 70
12 60
10 50
8 40
6 30
4 20
2 10
0 0
1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 2010 2020
Year
Chart 1. US debt, debt as % of GDP, first and top tax brackets (1910 – present).

6. Proposed Ideas
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%.

7. 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

8. 25 50,000
Bottom Second Third
Quarter Quarter Quarter
(0 - 25%) (25 - 50%) (50 - 75%)
20 40,000
Federal Income Tax (%)
After Tax Income ($)
15 30,000
10 20,000
% Income Taxed (Current)
% Income Taxed (Proposed)
5 10,000
After Tax Income (Current)
After Tax Income (Proposed)
0 0
–
–
–
0 12,300 27,500 40,000 56,100
(25% income) (75% income)
Adjusted Gross Income ($)
Chart 2. Federal income tax and after tax income for bottom 75% Americans.

9. 35 B S T
350,000
o e h Near Top Quarter
t c i
t o r
(75 - 99%)
o n d
30 m d
Q
300,000
Q Q u
u u a
a a r
r r t
25 t t e 250,000
Federal Income Tax (%)
e e r
After Tax Income ($)
r r 5
0 2 0
5 I
20 I
2 I 7 200,000
5 5 5
% 0 %
%
15 150,000
% Income Taxed (Current)
% Income Taxed (Proposed)
10 100,000
After Tax Income (Current)
After Tax Income (Proposed)
5 50,000
0 0
–
–
0 56,100 150,000 300,000 408,000
(75% income) Adjusted Gross Income ($) (99% income)
Chart 3. Federal income tax and after tax income for bottom 99% Americans.

10. 40 1,200,000
B Near Top 24.9%
o (75 - 99.9%)
t
t
o
30 m 900,000
Federal Income Tax (%)
7
After Tax Income ($)
5
%
20 600,000
10 300,000
% Income Taxed (Current)
% Income Taxed (Proposed)
After Tax Income (Current)
After Tax Income (Proposed)
99.8% Income
0 0
–
–
0 408,000 1,110,000 1,660,000
(99% income) Adjusted Gross Income ($) (99.9% income)
Chart 4. Federal income tax and after tax income for bottom 99.9% Americans.

11. 60 18,000,000
Near Top 0.1%
(99.9 - 99.999%)
50 15,000,000
Federal Income Tax (%)
40 12,000,000
After Tax Income ($)
30 9,000,000
20 6,000,000
% Income Taxed (Current)
% Income Taxed (Proposed)
10 3,000,000
After Tax Income (Current)
After Tax Income (Proposed)
99.8% Income
0 0
–
–
0 1,660,000 10,000,000 20,000,000
(99.9% income) Adjusted Gross Income ($) (99.999% income)
Chart 5. Federal income tax and after tax income for bottom 99.999% Americans.

12. 60 60
S T
e h
Bottom c i Top Quarter
50 50
Quarter o r (75 - 99.9999%)
(0 - 25%) n d
40 d 40
Q
Q u
Federal Income Tax (%)
u a
30 a r 30
r t
t
% Increase
e
20 e r
20
r
10 10
2 5
5 0
0 0
I I % Income Taxed (Current)
5 7 % Income Taxed (Proposed)
-10 -10
0 5 % Increase
% %
99.8% Income
-20 -20
-30 -30
1,000 10,000 100,000 1,000,000 10,000,000 100,000,000
Adjusted Gross Income ($) (99.9999% income)
Chart 6. Federal income tax and after tax income for bottom 99.9999% Americans.

13. 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.

14. 110 110
S T
Bottom e h Top Quarter
100 c i 100
Quarter (75 - 99.9999%)
Federal Income Tax Including Health Care (%)
o r
(0 - 25%)
90 n d 90
d
% Increase Including Health Care
Q
80 Q u 80
% Income Taxed (Current)
u a
r % Income Taxed (Proposed)
70 a 70
r t % Increase (Including Health Care)
t e
60 r 60
e
r
50 50
2
5
40 40
I 5
5 0
30 0
30
I
%
20 20
7
5
10 % 10
0 0
1,000 10,000 100,000 1,000,000 10,000,000 100,000,000
Adjusted Gross Income ($) (99.9999% income)
Chart 7. Federal income tax and after tax income for bottom 99.9999% Americans.

15. 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.