x = gross_income / median_income;
if( x <= 1 )
{
return 0;
}
if( x <= 50 )
{
y = ( x * Math.ln( x ) - x + 1 ) / Math.ln( 2500 );
}
else
{
y = x - 0.5 * Math.ln( 50 ) * Math.li( x ) + 4.862;
}
return y * median_income;
The constants are based on the income at 50 times the median income having a marginal tax rate of 50%, and the median income having a marginal tax rate of 0%. Marginal tax rates above 50% asymptotically approach 100%. There are no loopholes or exemptions.
If the median income is $32k, and you earned $31k, your tax is zero. Your only obligation is to report your gross income honestly, so that the median income is calculated accurately for next year. If your income is $96k, your x = 3.0, your y = 0.1656, so your tax is $15.9k . If your income is $1.6M, your x = 50, your y = 18.74, so your tax is $600k . If your income is $32M, your x = 1000, your y = 657.5, and your tax = $21M.
The only effective ways to reduce your tax would be to reduce your income (as reported) or raise the nationwide median income, such as by paying your lowest-paid workers more in the previous year.
Seems fair to me.
If you add up all the incomes of all the tax-paying entities, it should equal the money supply multiplied by the velocity, minus the unreported income economy.
Your argument rests on the presumption that the economy needs super-rich people to be performant, when corporations and governments have already solved the problem of collaborative concentration of capital. If they leave, and the economy somehow fails to collapse, they have shown the lie behind rich folks as "job creators".
Economies are run by the people who do the work. Sitting on ass and writing checks serves to weed out some of the worst ideas, and shuffling financial instruments serves to lubricate the gears of the economic machine, but should the rich ever go on strike, they will immediately lose all their leverage as the economy restructures itself to work without them. At worst, they can just get replaced by newly-minted rich people.
And, contrariwise, when a nation coddles its billionaires, and lets them do whatever they want, that's how you get the current US government. Nobody's starving, though. Not yet. We still might check that off with another government shutdown and another trade war escalation and another diplomatic insult or provocation.
Committing to give people someone else's money is every government expenditure that is paid for by taxation. It's the welfare state. It's the military-industrial complex. It's infrastructure projects. It's corruption. It's operating funds for regulatory agencies. It's foreign adventurism. Everything. Most governments have budgets that are funded entirely by "somebody else's money". You have made several unspoken assumptions in this discussion, and I think it may be best for you to make them explicit before continuing.
People aren't leaving Venezuela because taxes are high. And Venezuela's problems aren't a result of rich folks fleeing to Miami and Madrid. They are all leaving--the non-government rich, the middle-class, and the poor--because price-fixing creates shortages, and there is no such thing as a free lunch. If one pays for the party with oil money, one also has to turn off the music when the international commodity price for Venezuelan crude oil goes down. But they didn't turn it off; they turned it up.
Can you provide any details on Venezuela's progressive income tax? All I could find was a flat 34% tax on income for nonresidents, and that the lowest rate for residents might be 6%. Which Venezuelans left specifically because they didn't want to pay 34%?