Victory Tax: A Holistic Income Tax System
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  • Release Date: 2022-06-23
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  • income tax
  • tax deduction
  • income redistribution
Video Introduction

This video is adapted from 10.3390/e23111492

How can an income tax system be designed to exploit human nature and a free market to create a poverty free society, while balancing budgets without disproportional tax burdens? Such a tax system, with universal character, is deduced from the following guiding principles: (1) a single tax rate applies to all income types and levels; (2) the tax rate adjusts to satisfy budget projections; (3) government transfer only supplements the income of households with self-generated income below the poverty line; (4) deductions for basic living expenses, itemized investments and capital losses are allowed; (5) deductions cannot be applied to government transfer. A general framework emerges with three parameters that determine a minimum allowed tax deduction, a maximum allowed itemized deduction, and a maximum deduction defined by income percentage. An income distribution that mimics the United States, and a series of log-normal distributions are considered to quantitatively compare detailed characteristics of this tax system to progressive and flat tax systems. To minimize government dependency while maximizing after-tax income, the effective tax rate (ETR) as a function of income percentile takes the shape of the letter, V, inspiring the name victory tax, where the middle class has the lowest ETR.

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Jacobs, D. Victory Tax: A Holistic Income Tax System. Encyclopedia. Available online: https://encyclopedia.pub/video/video_detail/346 (accessed on 30 May 2024).
Jacobs D. Victory Tax: A Holistic Income Tax System. Encyclopedia. Available at: https://encyclopedia.pub/video/video_detail/346. Accessed May 30, 2024.
Jacobs, Donald. "Victory Tax: A Holistic Income Tax System" Encyclopedia, https://encyclopedia.pub/video/video_detail/346 (accessed May 30, 2024).
Jacobs, D. (2022, June 23). Victory Tax: A Holistic Income Tax System. In Encyclopedia. https://encyclopedia.pub/video/video_detail/346
Jacobs, Donald. "Victory Tax: A Holistic Income Tax System." Encyclopedia. Web. 23 June, 2022.
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