Appendix A: More Flat Tax Charts
Placing all the charts I generated in the main text of Free Money as Flat Tax Prebate would have excessively broken up the flow. So here they all are in an appendix for those who want more numbers. We look at single wage earners, couples and families of four in the charts below. We apply two models to the existing tax system: an assumed 15% rate of itemized deductions and a 20%. Any taxpayer whose itemized deductions come out as less than the standard deduction uses the standard deduction.
No child credits or retirement plans are applied here. Retirement plans are income deferred vs. true deductions. We also ignore employer provided health insurance and HSAs. Some definitions:
- Nominal income: this is the stated salary, and your gross income for tax purposes.
- Total income: this is nominal income plus the employer paid portion of FICA (Social Security) and Medicare taxes.
- Payroll tax: sum of employer and employee portions of Medicare and FICA.
- Income tax: an estimate of federal income tax paid by individual or family.
- Total tax: income plus payroll tax under the current system.
- Average rate: total tax / total income * 100%. This is the percent the government takes of what an employer is actually paying to hire an employee.
- Marginal rate: the percent that the government takes of an additional dollar of total income at the nominal income in question.
- Flat Tax @x%: suppose we replaced income and payroll taxes with a flat tax of x% of total income with no deductions. This is the amount that the government would collect if there was not rebate.
- Prebate: this is a term borrowed from the Fair Tax people. A prebate is the same as a tax rebate save that it can exceed the amount of taxes paid. This provides a smooth transition from taxpayer to free money recipient, so smooth that it pays to work at all income levels.
- Prebate to Match @x%: Now suppose we gave every adult citizen a fixed amount of free money every year. The amount in this column is the amount of annual free money per adult citizen to match the current tax system at this income level. If we set the free money amount higher than this figure, then those with an income at this row get a tax cut. If the free money is higher than the Flat Tax @x% column, then people at this income are receiving a net subsidy from the government. Multiply the tax raise/cut/subsidy by two to see what families receive from a flat tax/prebate combination.
Assuming a 15% Deduction Rate
Assuming that people are on average able to itemize 15% of their income (or take the standard deduction if that is higher), here are their tax rates and the comparison charts with a flat tax plan with prebate.
For individuals:
Num adults1, Num children: 0, Estimated current deduction rate 15% |
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Nominal Income | Total Income | Payroll Tax | Income Tax | Total Tax | Average Rate % | Marginal Rate % | |
---|---|---|---|---|---|---|---|
$14500 | $15609 | $2219 | $515 | $2734 | 17.5 | 23.5 | |
$25000 | $26913 | $3825 | $1929 | $5754 | 21.4 | 28.1 | |
$30000 | $32295 | $4590 | $2679 | $7269 | 22.5 | 28.1 | |
$40000 | $43060 | $6120 | $4134 | $10254 | 23.8 | 26.1 | |
$50000 | $53825 | $7650 | $5894 | $13544 | 25.2 | 34.0 | |
$60000 | $64590 | $9180 | $8019 | $17199 | 26.6 | 34.0 | |
$75000 | $80738 | $11475 | $11206 | $22681 | 28.1 | 34.0 | |
$100000 | $107650 | $15300 | $16519 | $31819 | 29.6 | 34.0 | |
$200000 | $209522 | $19043 | $40287 | $59330 | 28.3 | 26.3 | |
$300000 | $310972 | $21943 | $68062 | $90005 | 28.9 | 30.5 | |
$500000 | $513872 | $27743 | $125116 | $152860 | 29.7 | 32.2 | |
$1000000 | $1021122 | $42243 | $273866 | $316109 | 31.0 | 32.2 | |
$2000000 | $2035622 | $71243 | $571366 | $642609 | 31.6 | 32.2 | |
$5000000 | $5079122 | $158243 | $1463866 | $1622110 | 31.9 | 32.2 |
Num adults1, Num children: 0, Estimated current deduction rate 15% |
|||||||||
Nominal Income | Total Tax | Flat Tax @25% | Prebate to Match @25% | Flat Tax @30% | Prebate to Match @30% | Flat Tax @35% | Prebate to Match @35% | Flat Tax @40% | Prebate to Match @40% |
---|---|---|---|---|---|---|---|---|---|
$14500 | $2734 | $3902 | $1169 | $4683 | $1949 | $5463 | $2730 | $6244 | $3510 |
$25000 | $5754 | $6728 | $974 | $8074 | $2320 | $9419 | $3666 | $10765 | $5011 |
$30000 | $7269 | $8074 | $805 | $9689 | $2420 | $11303 | $4035 | $12918 | $5649 |
$40000 | $10254 | $10765 | $511 | $12918 | $2664 | $15071 | $4817 | $17224 | $6970 |
$50000 | $13544 | $13456 | $-88 | $16148 | $2604 | $18839 | $5295 | $21530 | $7986 |
$60000 | $17199 | $16148 | $-1051 | $19377 | $2178 | $22607 | $5408 | $25836 | $8637 |
$75000 | $22681 | $20184 | $-2497 | $24221 | $1540 | $28258 | $5577 | $32295 | $9614 |
$100000 | $31819 | $26913 | $-4906 | $32295 | $476 | $37678 | $5859 | $43060 | $11241 |
$200000 | $59330 | $52380 | $-6950 | $62856 | $3526 | $73333 | $14002 | $83809 | $24478 |
$300000 | $90005 | $77743 | $-12263 | $93291 | $3286 | $108840 | $18835 | $124389 | $34383 |
$500000 | $152860 | $128468 | $-24392 | $154162 | $1302 | $179855 | $26996 | $205549 | $52689 |
$1000000 | $316109 | $255280 | $-60829 | $306337 | $-9773 | $357393 | $41283 | $408449 | $92339 |
$2000000 | $642609 | $508905 | $-133704 | $610687 | $-31923 | $712468 | $69858 | $814249 | $171639 |
$5000000 | $1622110 | $1269780 | $-352329 | $1523737 | $-98373 | $1777693 | $155583 | $2031649 | $409539 |
For couples with no children:
Num adults2, Num children: 0, Estimated current deduction rate 15% |
|||||||
Nominal Income | Total Income | Payroll Tax | Income Tax | Total Tax | Average Rate % | Marginal Rate % | |
---|---|---|---|---|---|---|---|
$14500 | $15609 | $2219 | $0 | $2219 | 14.2 | 14.2 | |
$25000 | $26913 | $3825 | $630 | $4455 | 16.6 | 23.5 | |
$30000 | $32295 | $4590 | $1130 | $5720 | 17.7 | 23.5 | |
$40000 | $43060 | $6120 | $2358 | $8478 | 19.7 | 28.1 | |
$50000 | $53825 | $7650 | $3858 | $11508 | 21.4 | 28.1 | |
$60000 | $64590 | $9180 | $5358 | $14538 | 22.5 | 28.1 | |
$75000 | $80738 | $11475 | $7608 | $19083 | 23.6 | 28.1 | |
$100000 | $107650 | $15300 | $11788 | $27088 | 25.2 | 34.0 | |
$200000 | $215300 | $30600 | $33800 | $64400 | 29.9 | 36.3 | |
$300000 | $317593 | $35186 | $59522 | $94708 | 29.8 | 30.5 | |
$500000 | $520493 | $40986 | $116503 | $157489 | 30.3 | 32.2 | |
$1000000 | $1027743 | $55486 | $265253 | $320739 | 31.2 | 32.2 | |
$2000000 | $2042243 | $84486 | $562753 | $647239 | 31.7 | 32.2 | |
$5000000 | $5085743 | $171486 | $1455253 | $1626739 | 32.0 | 32.2 |
Num adults2, Num children: 0, Estimated current deduction rate 15% |
|||||||||
Nominal Income | Total Tax | Flat Tax @25% | Prebate to Match @25% | Flat Tax @30% | Prebate to Match @30% | Flat Tax @35% | Prebate to Match @35% | Flat Tax @40% | Prebate to Match @40% |
---|---|---|---|---|---|---|---|---|---|
$14500 | $2219 | $3902 | $842 | $4683 | $1232 | $5463 | $1622 | $6244 | $2013 |
$25000 | $4455 | $6728 | $1137 | $8074 | $1809 | $9419 | $2482 | $10765 | $3155 |
$30000 | $5720 | $8074 | $1177 | $9689 | $1984 | $11303 | $2792 | $12918 | $3599 |
$40000 | $8478 | $10765 | $1144 | $12918 | $2220 | $15071 | $3297 | $17224 | $4373 |
$50000 | $11508 | $13456 | $974 | $16148 | $2320 | $18839 | $3666 | $21530 | $5011 |
$60000 | $14538 | $16148 | $805 | $19377 | $2420 | $22607 | $4035 | $25836 | $5649 |
$75000 | $19083 | $20184 | $551 | $24221 | $2569 | $28258 | $4588 | $32295 | $6606 |
$100000 | $27088 | $26913 | $-88 | $32295 | $2604 | $37678 | $5295 | $43060 | $7986 |
$200000 | $64400 | $53825 | $-5287 | $64590 | $95 | $75355 | $5478 | $86120 | $10860 |
$300000 | $94708 | $79398 | $-7655 | $95278 | $285 | $111158 | $8225 | $127037 | $16164 |
$500000 | $157489 | $130123 | $-13683 | $156148 | $-671 | $182173 | $12342 | $208197 | $25354 |
$1000000 | $320739 | $256936 | $-31902 | $308323 | $-6208 | $359710 | $19485 | $411097 | $45179 |
$2000000 | $647239 | $510561 | $-68339 | $612673 | $-17283 | $714785 | $33773 | $816897 | $84829 |
$5000000 | $1626739 | $1271436 | $-177652 | $1525723 | $-50508 | $1780010 | $76635 | $2034297 | $203779 |
For couples with two children:
Num adults2, Num children: 2, Estimated current deduction rate 15% |
|||||||
Nominal Income | Total Income | Payroll Tax | Income Tax | Total Tax | Average Rate % | Marginal Rate % | |
---|---|---|---|---|---|---|---|
$14500 | $15609 | $2219 | $0 | $2219 | 14.2 | 14.2 | |
$25000 | $26913 | $3825 | $0 | $3825 | 14.2 | 14.2 | |
$30000 | $32295 | $4590 | $400 | $4990 | 15.5 | 23.5 | |
$40000 | $43060 | $6120 | $1400 | $7520 | 17.5 | 23.5 | |
$50000 | $53825 | $7650 | $2763 | $10413 | 19.3 | 28.1 | |
$60000 | $64590 | $9180 | $4263 | $13443 | 20.8 | 28.1 | |
$75000 | $80738 | $11475 | $6513 | $17988 | 22.3 | 28.1 | |
$100000 | $107650 | $15300 | $9963 | $25263 | 23.5 | 34.0 | |
$200000 | $215300 | $30600 | $31756 | $62356 | 29.0 | 36.3 | |
$300000 | $317593 | $35186 | $57113 | $92299 | 29.1 | 30.5 | |
$500000 | $520493 | $40986 | $113948 | $154934 | 29.8 | 32.2 | |
$1000000 | $1027743 | $55486 | $262698 | $318184 | 31.0 | 32.2 | |
$2000000 | $2042243 | $84486 | $560198 | $644684 | 31.6 | 32.2 | |
$5000000 | $5085743 | $171486 | $1452698 | $1624184 | 31.9 | 32.2 |
Num adults2, Num children: 2, Estimated current deduction rate 15% |
|||||||||
Nominal Income | Total Tax | Flat Tax @25% | Prebate to Match @25% | Flat Tax @30% | Prebate to Match @30% | Flat Tax @35% | Prebate to Match @35% | Flat Tax @40% | Prebate to Match @40% |
---|---|---|---|---|---|---|---|---|---|
$14500 | $2219 | $3902 | $842 | $4683 | $1232 | $5463 | $1622 | $6244 | $2013 |
$25000 | $3825 | $6728 | $1452 | $8074 | $2124 | $9419 | $2797 | $10765 | $3470 |
$30000 | $4990 | $8074 | $1542 | $9689 | $2349 | $11303 | $3157 | $12918 | $3964 |
$40000 | $7520 | $10765 | $1623 | $12918 | $2699 | $15071 | $3776 | $17224 | $4852 |
$50000 | $10413 | $13456 | $1522 | $16148 | $2868 | $18839 | $4213 | $21530 | $5559 |
$60000 | $13443 | $16148 | $1353 | $19377 | $2967 | $22607 | $4582 | $25836 | $6197 |
$75000 | $17988 | $20184 | $1098 | $24221 | $3117 | $28258 | $5135 | $32295 | $7154 |
$100000 | $25263 | $26913 | $825 | $32295 | $3516 | $37678 | $6208 | $43060 | $8899 |
$200000 | $62356 | $53825 | $-4265 | $64590 | $1117 | $75355 | $6500 | $86120 | $11882 |
$300000 | $92299 | $79398 | $-6451 | $95278 | $1489 | $111158 | $9429 | $127037 | $17369 |
$500000 | $154934 | $130123 | $-12406 | $156148 | $607 | $182173 | $13619 | $208197 | $26631 |
$1000000 | $318184 | $256936 | $-30624 | $308323 | $-4931 | $359710 | $20763 | $411097 | $46456 |
$2000000 | $644684 | $510561 | $-67062 | $612673 | $-16006 | $714785 | $35050 | $816897 | $86106 |
$5000000 | $1624184 | $1271436 | $-176374 | $1525723 | $-49231 | $1780010 | $77913 | $2034297 | $205056 |
Assuming a 20% Deduction Rate
Run the same studies as above but we now assume that under the current system people are actually able to deduct 20% of their nominal income on average.
For individuals:
Num adults1, Num children: 0, Estimated current deduction rate 20% |
|||||||
Nominal Income | Total Income | Payroll Tax | Income Tax | Total Tax | Average Rate % | Marginal Rate % | |
---|---|---|---|---|---|---|---|
$14500 | $15609 | $2219 | $515 | $2734 | 17.5 | 23.5 | |
$25000 | $26913 | $3825 | $1929 | $5754 | 21.4 | 28.1 | |
$30000 | $32295 | $4590 | $2634 | $7224 | 22.4 | 28.1 | |
$40000 | $43060 | $6120 | $3834 | $9954 | 23.1 | 25.4 | |
$50000 | $53825 | $7650 | $5269 | $12919 | 24.0 | 32.8 | |
$60000 | $64590 | $9180 | $7269 | $16449 | 25.5 | 32.8 | |
$75000 | $80738 | $11475 | $10269 | $21744 | 26.9 | 32.8 | |
$100000 | $107650 | $15300 | $15269 | $30569 | 28.4 | 32.8 | |
$200000 | $209522 | $19043 | $37487 | $56530 | 27.0 | 24.9 | |
$300000 | $310972 | $21943 | $63112 | $85055 | 27.4 | 28.9 | |
$500000 | $513872 | $27743 | $116366 | $144110 | 28.0 | 30.5 | |
$1000000 | $1021122 | $42243 | $256366 | $298609 | 29.2 | 30.5 | |
$2000000 | $2035622 | $71243 | $536366 | $607609 | 29.8 | 30.5 | |
$5000000 | $5079122 | $158243 | $1376366 | $1534610 | 30.2 | 30.5 |
Num adults1, Num children: 0, Estimated current deduction rate 20% |
|||||||||
Nominal Income | Total Tax | Flat Tax @25% | Prebate to Match @25% | Flat Tax @30% | Prebate to Match @30% | Flat Tax @35% | Prebate to Match @35% | Flat Tax @40% | Prebate to Match @40% |
---|---|---|---|---|---|---|---|---|---|
$14500 | $2734 | $3902 | $1169 | $4683 | $1949 | $5463 | $2730 | $6244 | $3510 |
$25000 | $5754 | $6728 | $974 | $8074 | $2320 | $9419 | $3666 | $10765 | $5011 |
$30000 | $7224 | $8074 | $850 | $9689 | $2465 | $11303 | $4080 | $12918 | $5694 |
$40000 | $9954 | $10765 | $811 | $12918 | $2964 | $15071 | $5117 | $17224 | $7270 |
$50000 | $12919 | $13456 | $538 | $16148 | $3229 | $18839 | $5920 | $21530 | $8611 |
$60000 | $16449 | $16148 | $-301 | $19377 | $2928 | $22607 | $6158 | $25836 | $9387 |
$75000 | $21744 | $20184 | $-1559 | $24221 | $2478 | $28258 | $6514 | $32295 | $10551 |
$100000 | $30569 | $26913 | $-3656 | $32295 | $1726 | $37678 | $7109 | $43060 | $12491 |
$200000 | $56530 | $52380 | $-4150 | $62856 | $6326 | $73333 | $16802 | $83809 | $27278 |
$300000 | $85055 | $77743 | $-7313 | $93291 | $8236 | $108840 | $23785 | $124389 | $39333 |
$500000 | $144110 | $128468 | $-15642 | $154162 | $10052 | $179855 | $35746 | $205549 | $61439 |
$1000000 | $298609 | $255280 | $-43329 | $306337 | $7727 | $357393 | $58783 | $408449 | $109839 |
$2000000 | $607609 | $508905 | $-98704 | $610687 | $3077 | $712468 | $104858 | $814249 | $206639 |
$5000000 | $1534610 | $1269780 | $-264829 | $1523737 | $-10873 | $1777693 | $243083 | $2031649 | $497039 |
For couples with no children:
Num adults2, Num children: 0, Estimated current deduction rate 20% |
|||||||
Nominal Income | Total Income | Payroll Tax | Income Tax | Total Tax | Average Rate % | Marginal Rate % | |
---|---|---|---|---|---|---|---|
$14500 | $15609 | $2219 | $0 | $2219 | 14.2 | 14.2 | |
$25000 | $26913 | $3825 | $630 | $4455 | 16.6 | 23.5 | |
$30000 | $32295 | $4590 | $1130 | $5720 | 17.7 | 23.5 | |
$40000 | $43060 | $6120 | $2358 | $8478 | 19.7 | 28.1 | |
$50000 | $53825 | $7650 | $3858 | $11508 | 21.4 | 28.1 | |
$60000 | $64590 | $9180 | $5268 | $14448 | 22.4 | 28.1 | |
$75000 | $80738 | $11475 | $7068 | $18543 | 23.0 | 28.1 | |
$100000 | $107650 | $15300 | $10538 | $25838 | 24.0 | 32.8 | |
$200000 | $215300 | $30600 | $31000 | $61600 | 28.6 | 35.0 | |
$300000 | $317593 | $35186 | $54572 | $89758 | 28.3 | 28.9 | |
$500000 | $520493 | $40986 | $107753 | $148739 | 28.6 | 30.5 | |
$1000000 | $1027743 | $55486 | $247753 | $303239 | 29.5 | 30.5 | |
$2000000 | $2042243 | $84486 | $527753 | $612239 | 30.0 | 30.5 | |
$5000000 | $5085743 | $171486 | $1367753 | $1539239 | 30.3 | 30.5 |
Num adults2, Num children: 0, Estimated current deduction rate 20% |
|||||||||
Nominal Income | Total Tax | Flat Tax @25% | Prebate to Match @25% | Flat Tax @30% | Prebate to Match @30% | Flat Tax @35% | Prebate to Match @35% | Flat Tax @40% | Prebate to Match @40% |
---|---|---|---|---|---|---|---|---|---|
$14500 | $2219 | $3902 | $842 | $4683 | $1232 | $5463 | $1622 | $6244 | $2013 |
$25000 | $4455 | $6728 | $1137 | $8074 | $1809 | $9419 | $2482 | $10765 | $3155 |
$30000 | $5720 | $8074 | $1177 | $9689 | $1984 | $11303 | $2792 | $12918 | $3599 |
$40000 | $8478 | $10765 | $1144 | $12918 | $2220 | $15071 | $3297 | $17224 | $4373 |
$50000 | $11508 | $13456 | $974 | $16148 | $2320 | $18839 | $3666 | $21530 | $5011 |
$60000 | $14448 | $16148 | $850 | $19377 | $2465 | $22607 | $4080 | $25836 | $5694 |
$75000 | $18543 | $20184 | $821 | $24221 | $2839 | $28258 | $4858 | $32295 | $6876 |
$100000 | $25838 | $26913 | $538 | $32295 | $3229 | $37678 | $5920 | $43060 | $8611 |
$200000 | $61600 | $53825 | $-3887 | $64590 | $1495 | $75355 | $6878 | $86120 | $12260 |
$300000 | $89758 | $79398 | $-5180 | $95278 | $2760 | $111158 | $10700 | $127037 | $18639 |
$500000 | $148739 | $130123 | $-9308 | $156148 | $3704 | $182173 | $16717 | $208197 | $29729 |
$1000000 | $303239 | $256936 | $-23152 | $308323 | $2542 | $359710 | $28235 | $411097 | $53929 |
$2000000 | $612239 | $510561 | $-50839 | $612673 | $217 | $714785 | $51273 | $816897 | $102329 |
$5000000 | $1539239 | $1271436 | $-133902 | $1525723 | $-6758 | $1780010 | $120385 | $2034297 | $247529 |
For couples with two children:
Num adults2, Num children: 2, Estimated current deduction rate 20% |
|||||||
Nominal Income | Total Income | Payroll Tax | Income Tax | Total Tax | Average Rate % | Marginal Rate % | |
---|---|---|---|---|---|---|---|
$14500 | $15609 | $2219 | $0 | $2219 | 14.2 | 14.2 | |
$25000 | $26913 | $3825 | $0 | $3825 | 14.2 | 14.2 | |
$30000 | $32295 | $4590 | $400 | $4990 | 15.5 | 23.5 | |
$40000 | $43060 | $6120 | $1400 | $7520 | 17.5 | 23.5 | |
$50000 | $53825 | $7650 | $2763 | $10413 | 19.3 | 28.1 | |
$60000 | $64590 | $9180 | $4173 | $13353 | 20.7 | 28.1 | |
$75000 | $80738 | $11475 | $5973 | $17448 | 21.6 | 28.1 | |
$100000 | $107650 | $15300 | $8973 | $24273 | 22.5 | 25.4 | |
$200000 | $215300 | $30600 | $28956 | $59556 | 27.7 | 35.0 | |
$300000 | $317593 | $35186 | $52163 | $87349 | 27.5 | 28.9 | |
$500000 | $520493 | $40986 | $105198 | $146184 | 28.1 | 30.5 | |
$1000000 | $1027743 | $55486 | $245198 | $300684 | 29.3 | 30.5 | |
$2000000 | $2042243 | $84486 | $525198 | $609684 | 29.9 | 30.5 | |
$5000000 | $5085743 | $171486 | $1365198 | $1536684 | 30.2 | 30.5 |
Num adults2, Num children: 2, Estimated current deduction rate 20% |
|||||||||
Nominal Income | Total Tax | Flat Tax @25% | Prebate to Match @25% | Flat Tax @30% | Prebate to Match @30% | Flat Tax @35% | Prebate to Match @35% | Flat Tax @40% | Prebate to Match @40% |
---|---|---|---|---|---|---|---|---|---|
$14500 | $2219 | $3902 | $842 | $4683 | $1232 | $5463 | $1622 | $6244 | $2013 |
$25000 | $3825 | $6728 | $1452 | $8074 | $2124 | $9419 | $2797 | $10765 | $3470 |
$30000 | $4990 | $8074 | $1542 | $9689 | $2349 | $11303 | $3157 | $12918 | $3964 |
$40000 | $7520 | $10765 | $1623 | $12918 | $2699 | $15071 | $3776 | $17224 | $4852 |
$50000 | $10413 | $13456 | $1522 | $16148 | $2868 | $18839 | $4213 | $21530 | $5559 |
$60000 | $13353 | $16148 | $1398 | $19377 | $3012 | $22607 | $4627 | $25836 | $6242 |
$75000 | $17448 | $20184 | $1368 | $24221 | $3387 | $28258 | $5405 | $32295 | $7424 |
$100000 | $24273 | $26913 | $1320 | $32295 | $4011 | $37678 | $6703 | $43060 | $9394 |
$200000 | $59556 | $53825 | $-2865 | $64590 | $2517 | $75355 | $7900 | $86120 | $13282 |
$300000 | $87349 | $79398 | $-3976 | $95278 | $3964 | $111158 | $11904 | $127037 | $19844 |
$500000 | $146184 | $130123 | $-8031 | $156148 | $4982 | $182173 | $17994 | $208197 | $31006 |
$1000000 | $300684 | $256936 | $-21874 | $308323 | $3819 | $359710 | $29513 | $411097 | $55206 |
$2000000 | $609684 | $510561 | $-49562 | $612673 | $1494 | $714785 | $52550 | $816897 | $103607 |
$5000000 | $1536684 | $1271436 | $-132624 | $1525723 | $-5481 | $1780010 | $121663 | $2034297 | $248806 |