User:DoktorTom4tune

New income and wage tax model

I discovered by chance a new income and wage tax model.

The new thing is the calculation of the monthly income tax on salaries. I use a new base for estimation of the tax percentage. This algorithm gives the governments a control instrument to influence the economy more qualitative.

I will give you further information of the algorithm.  

The existing income tax models are a link between gross income from employment and wage rate. The following relationship shows that as a different kind of wage tax rate calculation is.

     (1)  $income=expenditure+saving$

          $E=A+S$

The equation (1) indicates that the income can be spent and saved. The income is calculated from the gross income and the wage tax rate.

     (2)  $gross\ income'(1-wage\ tax\ rate)=expenditure+saving$

          $B'(1-x)=A+S$

  (2a) $gross\ income'=gross\ income-social\ contributions$

         $B'=B-social\ contributions$ 

Gross income' is a fictitious gross income. Social contributions are the sum of unemployment contribution, pension contribution and health insurance contributions.

Determining the wage tax rate of (2):

     (3)  $wage\ tax\ rate=\left({\frac {gross\ income'-expenditure-saving}{gross\ income'}}\right)$

            

          $x=1-{\frac {A+S}{B'}}$

Using equation (3) results in a wage tax rate calculating that dependent on the 3 variables expenditures, saving and gross income'.

So we obtain a quadratic equation for x, the next equation (5).

      (5)  $x^{2}-x\left({\frac {1+B'-2A}{1+B'}}\right)-\left({\frac {A}{1+B'}}\right)=0$

With income I mean all forms of income. Just as unemployment benefits, pensions.

A tax increase or tax cut which is oriented to the consumption ratio. The expenditure for the next year are calculated on the wage tax curve.