The 'Ins & Outs' of the New Code
There are more income brackets – which are constructed in increments of the federal poverty level; linking tax brackets to a useful metric and not an arbitrary number.
This code has no deductions. While some deductions have historically been beneficial, it is wrong to coerce via tax code when that same coercion in law would be completely unconstitutional. If the federal government wants to support families or encourage investments, it can do so openly with laws and spending supported by the people.
It is a progressive tax; each consecutive bracket is taxed a little more. The step size of the increase also regularly reduces to prevent over-taxation and to mathematically limit the maximum rate.
This new code has a structurally limited maximum tax rate.
Each person with income pays their own taxes – no marriage penalty.
It is simple to calculate; most tax preparation could be done in minutes.
Using the starting numbers in the attached excel spreadsheet, these example values are an approximation of what would meet funding requirements for the federal government to function.
Total income: $60,000 Total tax paid: $3,280 (effective tax rate 5.47%)
Sample breakdown by brackets:
Bracket Tax Rate Max. Tax in Bracket Max Total Tax Paid
$0-13600 2% $272 $272
$13601-27200 4% $544 $816
$27291-40800 6% $816 $1632
$40801-54400 8% $1088 $2720
$54401-68000 10% $1360 $4080