U.S. Treasury



Original system based
on brackets from 1035%.
Proposed changes
include modifying the
existing bracket
distribution along
with tax rates.
Also introducing a
entirely new tax
bracket.
Existing Marginal Income Tax
Proposed Marginal Income Tax
Tax rate
Bracket
Tax rate
Bracket
10%
0 - $8,375
10%
0 - $8,375
15%
$8376 - $34,000
15%
$8376 - $34,000
25%
$34,001 - $82,400
25%
$34,001 - $99,999
28%
$82,401 - $171,850
30%
$100,000- $199,999
33%
$171,851 - $373,650
35%
$200,000 - $499,999
35%
$373651+
40%
$500,000 - $999,999
-
-
45%
$1,000,000+

Original system
divided investments
between short and
long term
designations.


Long term: 1 year+
Propose to reclassify
all investments as
normal income that
will be taxed through
the Marginal Income
Tax
Existing Capital Gains Tax
Short Term
Long Term
Tax rate
Tax Rate
10%
Proposed Capital Gains Tax
Bracket
Tax rate
Bracket
0%
0 - $8,375
10%
0 - $8,375
15%
0%
$8376 - $34,000
15%
$8376 - $34,000
25%
15%
$34,001 - $82,400
25%
$34,001 - $99,999
28%
15%
$82,401 - $171,850
30%
$100,000- $199,999
33%
15%
$171,851 - $373,650 35%
$200,000 - $499,999
35%
15%
$373651+
40%
$500,000 - $999,999
-
-
-
45%
$1,000,000+
CURRENT SYSTEM


Tax rate is based off brackets
of income.
Current tax rates are some of
the highest in the world,
however revenue is not
realized due to loop holes in
the deductions, credits, and
write-offs.



Interest from debts can be
deducted from income tax.
Overseas profit is taxed at a
much lower rate.
Special Preferences in
Industry's causes an unequal
economic playing field.
PROPOSED SYSTEM




Remove current bias towards debt
based financing by removing the
ability to deduct Interest paid on
loans from taxes.
All profit, whether made
domestically or overseas, is taxed
at the same rate.
Removal of all special preferences
to let the free market decide
economic value.
As an added incentive to promote
small business, for FY2013 we
suggest lowering the tax rate for
all new businesses who make
under $50,000 to 0%


Current system sets a
cut off at $5,000,000
and under. All
fortunes over this
amount are taxed at
the flat rate of 35%.
Propose to change to a
bracket based system
with increasing tax
rates.
Existing Estate Tax
Proposed Estate Tax
Tax rate
Bracket
Tax rate
Bracket
35%
$5,000,000+
30%
$5,000,000 - $9,999,999
-
-
35%
$10,000,000 - $19,999,999
-
-
40%
$20,000,000+





No national sales tax currently exists
Fair tax bill proposed in 1999, since then has had
many revisions that make it more and more
appealing.
All proponents suggest that this bill be introduced
IN PLACE of the Marginal Income Tax.
Tax rate necessary to match current income
revenue would be ~23%
Families could be given a consumption allowance
based on their size so low income families would
not be so disproportionately affected.



Current system taxes
less fuel efficient cars
more heavily.
Tax is determined
through a formula with
the vehicles city and
highway mileage as
inputs
Propose modifying the
constants of this
function to raise the
percentage taxed to a
steeper rate.

Current Formula:
𝐹(𝐹𝑐 , 𝐹ℎ )=
1
(
.495 .351
+
)
𝐹𝑐
𝐹ℎ
+ .15
Proposed Formula:
𝐹(𝐹𝑐 , 𝐹ℎ )=
1
.450 .325
(𝐹 +𝐹 )
𝑐
ℎ
+ .15
Existing Marginal Income Revenue
Proposed Marginal Income Revenue
Bracket
Population
Mean Income
Total Income
Revenue
Bracket
Population
Mean Income
Total Income
Revenue
0 - $8,375
60,902,000
$1,588.59
$96,748,319,000
$9,674,831,900
0 - $8,375
60,902,000
$1,588.59
$96,748,319,000
$9,674,831,900
$8376 - $34,000
99,936,000
$19,300.64
$1,928,829,019
$247,476,152,850
$8376 - $34,000
99,936,000
$19,300.64
$1,928,829,019,000
$247,476,152,850
$34,001 - $82,400
62,127,000
$52,147.91
$3,239,793,082,000
$572,700,789,250
$34,001 - $99,999
68,061,000
$55,459.41
$3,774,623,150,000
$683,747,843,750
$100,000 - $199,999
10,741,000
$127,528.36
$1,369,782,158,000
$316,212,990,700
$200,000 - $499,999
6,752,523
$379,847.00
$2,564,925,603,981
$770,650,594,439
$82,401 - $171,850
14,608,000
$125,988.08
$1,840,433,844,000
$423,426,200,320
$171,851 - $373,650
8,736,353
$312,934.70
$2,733,908,005,149
$764,349,648,153
$373651+
6,379,538
$1,023,054.00
$6,526,611,869,052
$2,135,985,111,014
$500,000 - $999,999
3,874,688
$722,983.30
$2,801,334,716,710
$1,008,870,803,087
Totals
252,688,891
$4,153,612,733,488
$1,000,000+
2,421,680
$1,401,343.00
$3,393,604,316,240
$1,293,869,236,144
Totals
252,688,891
$4,330,502,452,870
Brackets
0 - $8,375
$8376 - $34,000
$34,001 - $99,999
$100,000 - $199,999
$200,000 - $499,999
$500,000 - $999,999
$1,000,000+
Total
Net Change in
Revenue
$0.00
$0.00
$111,047,054,500.00
-$107,213,209,620.00
$6,300,946,285.95
-$1,127,114,307,927.34
$1,293,869,236,144.00
$176,889,719,382.61
Existing Capital Gains Tax
Brackets
0 - $8,375
$8376 - $34,000
$34,001 - $82,400
$82,401 - $171,850
$171,851 - $373,650
$373651+
Brackets
0 - $8,375
$8376 - $34,000
$34,001 - $82,400
$82,401 - $171,850
$171,851 - $373,650
$373651+
Totals
Distribution
13,958,000.00
Mean Income
Long Term Revenue OLD
$4,031.00
$0.00
56,512,000.00
$22,642.00
$0.00
48,611,000.00
$64,385.00
$469,472,885,250.00
13,431,000.00
$139,632.00
$281,309,608,800.00
3,606,000.00
$306,231.00
$165,640,347,900.00
3,109,000.00
$1,326,589.00
$618,654,780,150.00
Distribution
6,042,000.00
Mean Income
Short Term Revenue OLD
$4,031.00
$2,435,530,200.00
1,434,000.00
$22,642.00
$4,860,812,862.50
10,810,800.00
$65,402.00
$176,512,231,512.50
3,890,200.00
$137,950.00
$149,395,056,237.50
1,760,000.00
$304,600.00
$172,378,242,050.00
625,000.00
$1,302,650.00
$255,832,318,437.50
24,562,000.00
$761,414,191,300.00
Brackets
0 - $8,375
$8376 - $34,000
$34,001 -
Proposed Capital Gains Tax
Distribution
Mean Income Total
$4,031.00
$8,062,000,000.00
20,000,000
$22,642.00
$172,537,112,300.00
57,946,000
Brackets
$53,215.00
$576,830,275,000.00
60,815,000
$99,999
$100,000 -
$150,000.00
$662,913,778,600.00
$321,364.00
$502,572,852,500.00
$708,650.00
$230,959,749,800.00
$1,164,200.00
$192,715,937,850.00
18,322,000
$199,999
$200,000 -
5,366,000
$499,999
$500,000 -
907,000
$999,999
$1,000,000+
433,000
Totals
$2,346,591,706,050.00
163,789,000
0-8375
8376-34000
34001-99999
100000-199999
200000-499999
500000-999999
1000000+
Total
Net Change in
Revenue
$5,626,469,800.00
$167,676,299,437.50
-$69,154,841,762.50
$232,209,113,562.50
$164,554,262,550.00
-$643,527,348,787.50
$192,715,937,850.00
$50,099,892,650.00
Proposal
Revenue Effect
Remove bias towards debt based
financing.
$32,500,000,000
Reclassification of all profits under the $53,200,000,000
same tax rate as opposed to separate
domestic and overseas rates.
Removal of special preferences
towards industry's and allow the free
market to determine value.
$120,000,000,000
Introduce a one year tax deduction for -$7,000,000,000
new businesses who make under
$50,000 for FY 2013 (Effective rate: 0%)
Total
$201,400,000,000
Existing Estate Tax
Bracket
Distribution
Mean
Income
5,000,000+
8,600
$14,623,000.00
$44,015,230,000.00
Proposed Estate Tax
Bracket
Distribution
Mean
Income
5,000,000-9,999,999
5,870
$6,649,000.00
$13,660,370,500.00
10,000,00019,999,999
1,650
$13,542,000.00
$8,112,720,082.50
20,000,000+
1,090
$59,342,000.00
$36,737,250,182.50
Totals
8,600
Net Change
$58,510,340,765.00
$14,495,110,765.00
Existing & Proposed Gas Guzzler Tax
Bracket
Gas Guzzler
C/H/Com
Price
Old Tax
New Tax
MPG
Less than 12.5 MPG 2010 Bugatti Veyron
8,14,10
$1,990,064.00
$235,207.61
$253,420.12
2010 Lamborghini Murcielago Coupe
9,14,11
$450,000.00
$57,665.65
$62,138.41
12.5-13.5
2007 Lamborghini Gallardo Spyder M6, 10 cyl, 5L
11,17,13
$299,990.00
$46,789.10
$50,426.05
2008 Lamborghini Gallardo Coupe M6, 10 cyl, 5L
10,17,13
$190,600.00
$27,850.34
$30,012.51
2011 Bentley Mulsanne
2011 ROLLS ROYCE Phantom EWB
2009 DODGE CHARGER Auto(L5), 8 cyl, 6.1 L
11,18,13
11,18,14
13,19,15
$300,000.00
$450,000.00
$30,000.00
$47,626.55
$71,439.83
$5,423.14
$51,327.94
$76,991.92
$5,845.39
12,20,15
$121,250.00
$21,099.07
$22,740.01
16.5-17.5
2011 MASERATI QUATTROPORTE A6, 8 cyl, 4.2 L, 2WD
Rear
2009 DODGE CHALLENGER M6, 8cyl, 6.1 L
2009 FORD MUSTANG M6, 8 cyl, 5.4L
2009 CHEVROLET IMPALA Auto(L4), 6 cylinders, 3.5 liter,
14,22,16
14,20,16
14,22,17
$21,995.00
$25,000.00
$26,000.00
$4,380.05
$4,827.43
$5,177.60
$4,721.20
$5,203.55
$5,580.87
17.5-18.5
2011 AUDI S5 M6, 8 cyl, 4.2 L, AWD,
2011 PORSCHE Panamera Turbo A7, 8 cyl, 4.8 L, AWD,
14,22,17
15,23,18
$55,000.00
$127,500.00
$10,952.62
$26,980.23
$11,805.68
$29,082.88
2009 INFINITI M45 Auto(S5), 8 cylinders, 4.5 liter,
16,21,18
$31,684.00
$6,784.96
$7,314.30
2011 BMW Z4 sDrive35i S7, 6 cyl, 3L, 2WD,RearWD
17,24,19
$60,000.00
$13,993.56
$15,085.41
2011 HYUNDAI EQUUS A6, 8 cyl, 4.6L, 2WD,Rear WD
16,24,19
$58,000.00
$12,993.82
$14,007.00
2011 SUBARU LEGACY AWD S5, 6 cyl, 3.6 L, AWD
18,25,20
$25,000.00
$6,137.38
$6,616.45
2011 MERCEDES-BENZ SLK 350 M6,6 cyl,3.5 L, 2WD,Rear
18,26,20
$53,300.00
$13,258.52
$14,293.28
20.5-21.5
2011 MAZDA MAZDASPEED3 M6, 4 cyl, 2.3 L, 2WD Front
18,25,21
$23,700.00
$5,527.46
$6,272.39
21.5-22.5
2007 INFINITI M35 S5, 6 cyl, 3.5 L
2011 NISSAN MAXIMA AV-S6, 6 cyl, 3.5 L, 2WD Front
18,25,21
19,26,22
$22,561.00
$31,000.00
$5,538.61
$7,989.86
$5,970.95
$8,613.77
2011 TOYOTA MATRIX A4, 4 cyl, 2.4 L, AWD
20,26,22
$18,845.00
$5,020.32
$5,412.55
$642,663.71
$692,882.63
13.5-14.5
14.5-15.5
15.5-16.5
18.5-19.5
19.5-20.5
Totals
Sample set cars
Old Revenue
$642,663.71
New Revenue
$692,882.63
Net Change ($)
$50,218
Net Change (%) 7.81%
Total cars
Existing Revenue from Gas Guzzler
$9,392,075,000.00
Proposed rate increase
7.81%
Net Increase
$170,372,240.50