U.S. Treasury

 Original system based on brackets from %.  Proposed changes include modifying the existing bracket distribution along with tax rates.  Also introducing a entirely new tax bracket. Existing Marginal Income TaxProposed Marginal Income Tax Tax rate Bracket Tax rate Bracket 10% 0 - $8,375 10% 0 - $8,375 15% $ $34,000 15% $ $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% $ % $500,000 - $999, % $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 TaxProposed Capital Gains Tax Short Term Tax rate Long Term Tax Rate Bracket Tax rate Bracket 10%0% 0 - $8,375 10% 0 - $8,375 15%0% $ $34,000 15% $ $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% $ % $500,000 - $999, % $1,000,000+

CURRENT SYSTEMPROPOSED 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.  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 TaxProposed Estate Tax Tax rate Bracket Tax rate Bracket 35% $5,000, % $5,000,000 - $9,999, % $10,000,000 - $19,999, % $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.

Existing Marginal Income Revenue Bracket PopulationMean IncomeTotal IncomeRevenue 0 - $8,375 60,902,000$1,588.59$96,748,319,000$9,674,831,900 $ $34,000 99,936,000$19,300.64$1,928,829,019$247,476,152,850 $34,001 - $82,400 62,127,000$52,147.91$3,239,793,082,000$572,700,789,250 $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 $ ,379,538$1,023,054.00$6,526,611,869,052$2,135,985,111,014 Totals 252,688,891 $4,153,612,733,488 Proposed Marginal Income Revenue Bracket PopulationMean IncomeTotal IncomeRevenue 0 - $8,375 60,902,000$1,588.59$96,748,319,000$9,674,831,900 $ $34,000 99,936,000$19,300.64$1,928,829,019,000$247,476,152,850 $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 $500,000 - $999,999 3,874,688$722,983.30$2,801,334,716,710$1,008,870,803,087 $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 Net Change in Revenue 0 - $8,375 $0.00 $ $34,000 $0.00 $34,001 - $99,999 $111,047,054, $100,000 - $199,999 -$107,213,209, $200,000 - $499,999 $6,300,946, $500,000 - $999,999 -$1,127,114,307, $1,000,000+ $1,293,869,236, Total $176,889,719,382.61

Existing Capital Gains Tax BracketsDistributionMean IncomeLong Term Revenue OLD 0 - $8,375 13,958,000.00$4,031.00$0.00 $ $34,000 56,512,000.00$22,642.00$0.00 $34,001 - $82,400 48,611,000.00$64,385.00$469,472,885, $82,401 - $171,850 13,431,000.00$139,632.00$281,309,608, $171,851 - $373,650 3,606,000.00$306,231.00$165,640,347, $ ,109,000.00$1,326,589.00$618,654,780, Brackets Distribution Mean Income Short Term Revenue OLD 0 - $8,375 6,042,000.00$4,031.00$2,435,530, $ $34,000 1,434,000.00$22,642.00$4,860,812, $34,001 - $82,400 10,810,800.00$65,402.00$176,512,231, $82,401 - $171,850 3,890,200.00$137,950.00$149,395,056, $171,851 - $373,650 1,760,000.00$304,600.00$172,378,242, $ ,000.00$1,302,650.00$255,832,318, Totals 24,562,000.00$761,414,191,300.00

Brackets Net Change in Revenue $5,626,469, $167,676,299, $69,154,841, $232,209,113, $164,554,262, $643,527,348, $192,715,937, Total $50,099,892, Proposed Capital Gains Tax Brackets DistributionMean IncomeTotal 0 - $8,375 20,000,000 $4,031.00$8,062,000, $ $34,000 57,946,000 $22,642.00$172,537,112, $34,001 - $99,999 60,815,000 $53,215.00$576,830,275, $100,000 - $199,999 18,322,000 $150,000.00$662,913,778, $200,000 - $499,999 5,366,000 $321,364.00$502,572,852, $500,000 - $999, ,000 $708,650.00$230,959,749, $1,000, ,000 $1,164,200.00$192,715,937, Totals 163,789,000 $2,346,591,706,050.00

ProposalRevenue Effect Remove bias towards debt based financing. $32,500,000,000 Reclassification of all profits under the same tax rate as opposed to separate domestic and overseas rates. $53,200,000,000 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 new businesses who make under $50,000 for FY 2013 (Effective rate: 0%) -$7,000,000,000 Total$201,400,000,000

Existing Estate Tax BracketDistributionMeanIncome 5,000,000+8,600$14,623, $44,015,230, Proposed Estate Tax BracketDistributionMeanIncome 5,000,000-9,999,9995,870$6,649,000.00$13,660,370, ,000, ,999,999 1,650$13,542,000.00$8,112,720, ,000,000+1,090$59,342,000.00$36,737,250, Totals8,600$58,510,340, Net Change$14,495,110,765.00

Existing & Proposed Gas Guzzler Tax Bracket Gas Guzzler C/H/Com MPG PriceOld TaxNew Tax Less than 12.5 MPG 2010 Bugatti Veyron8,14,10$1,990,064.00$235,207.61$253, Lamborghini Murcielago Coupe9,14,11$450,000.00$57,665.65$62, Lamborghini Gallardo Spyder M6, 10 cyl, 5L11,17,13$299,990.00$46,789.10$50, Lamborghini Gallardo Coupe M6, 10 cyl, 5L10,17,13$190,600.00$27,850.34$30, Bentley Mulsanne11,18,13$300,000.00$47,626.55$51, ROLLS ROYCE Phantom EWB11,18,14$450,000.00$71,439.83$76, DODGE CHARGER Auto(L5), 8 cyl, 6.1 L13,19,15$30,000.00$5,423.14$5, MASERATI QUATTROPORTE A6, 8 cyl, 4.2 L, 2WD Rear 12,20,15$121,250.00$21,099.07$22, DODGE CHALLENGER M6, 8cyl, 6.1 L14,22,16$21,995.00$4,380.05$4, FORD MUSTANG M6, 8 cyl, 5.4L14,20,16$25,000.00$4,827.43$5, CHEVROLET IMPALA Auto(L4), 6 cylinders, 3.5 liter,14,22,17$26,000.00$5,177.60$5, AUDI S5 M6, 8 cyl, 4.2 L, AWD,14,22,17$55,000.00$10,952.62$11, PORSCHE Panamera Turbo A7, 8 cyl, 4.8 L, AWD,15,23,18$127,500.00$26,980.23$29, INFINITI M45 Auto(S5), 8 cylinders, 4.5 liter,16,21,18$31,684.00$6,784.96$7, BMW Z4 sDrive35i S7, 6 cyl, 3L, 2WD,RearWD17,24,19$60,000.00$13,993.56$15, HYUNDAI EQUUS A6, 8 cyl, 4.6L, 2WD,Rear WD16,24,19$58,000.00$12,993.82$14, SUBARU LEGACY AWD S5, 6 cyl, 3.6 L, AWD18,25,20$25,000.00$6,137.38$6, MERCEDES-BENZ SLK 350 M6,6 cyl,3.5 L, 2WD,Rear18,26,20$53,300.00$13,258.52$14, MAZDA MAZDASPEED3 M6, 4 cyl, 2.3 L, 2WD Front18,25,21$23,700.00$5,527.46$6, INFINITI M35 S5, 6 cyl, 3.5 L18,25,21$22,561.00$5,538.61$5, NISSAN MAXIMA AV-S6, 6 cyl, 3.5 L, 2WD Front19,26,22$31,000.00$7,989.86$8, TOYOTA MATRIX A4, 4 cyl, 2.4 L, AWD20,26,22$18,845.00$5,020.32$5, Totals $642,663.71$692,882.63

Sample set cars Old Revenue$642, New Revenue$692, Net Change ($)$50,218 Net Change (%)7.81% Total cars Existing Revenue from Gas Guzzler$9,392,075, Proposed rate increase7.81% Net Increase$170,372,240.50