The “Dennis” tax plan
People and taxes
Take 5 fictitious people – any race, creed or color – just generalizations.
All educated and single – no dependents
All have an apartment(shared)
Each pay $500 / month in utilities and rent (cheap)
Taxes
https://www.tax-brackets.org/federaltaxtable
https://www.tax-brackets.org/connecticuttaxtable
Timmy
Age 25
Works at fast food
Associates degree
Earns $10 / hour = $20,800 per year
Tommy
Age 25
Works at machine shop
Technical school
Earns $25 / hour = $52,000 / year
Tammy
Age 25
Works in Marketing
Bachelor’s Degree
Earns $50 / hour = $104,000 / year
Toni
Age 25
Works in finance
Bachelor’s Degree
Earns $100 / hour = $208,000 / year
T-Bone
Age 25
Works as a Landscaper
High school equivalency
Earns $500,000 / year
Current tax system
https://www.tax-brackets.org/federaltaxtable
https://www.tax-brackets.org/connecticuttaxtable
| Name | Salary | Tax rate fed | Tax fed | Tax rate state | Tax state | Net Salary | % of salary keep |
| Timmy | 20,800 | 15% | 3,120 | 5% | 1,040 | 16,640 | 80% |
| Tommy | 52,000 | 25% | 13,000 | 5.5% | 2,860 | 36,140 | 69.5% |
| Tammy | 104,000 | 28% | 29,120 | 6% | 6,240 | 68,640 | 66% |
| Toni | 208,000 | 33% | 68,640 | 6.5% | 13,520 | 125,840 | 60.5% |
| T-Bone | 500,000 | 39.6% | 198,000 | 6.99% | 34,950 | 267,050 | 53.4% |
As you earn more, you keep less – the incentive is to show a lower income, cheat the system – only way to get ahead and keep more of your $$
Tax revenue:
Fed = $311,880
State = $58,610
This is totally insane right here: -> For federal rate – 416,700+ pays 35% – whereas 418,400 pays 39.6% – so if I earn a little bit more, I get hit with an additional 4.6% tax – why should I be honest and report – this sets people up to cheat and try to earn less – whether reality or “creative accounting”.
This system penalizes you (takes a greater % of your money) as you grow in salary and success. – Bad JuJu…
Flat Tax
Reduce all tax (total by 5% – cut all by 5% – period) – hey the economy is tough, need to cut back, right?
Total from above (adjusted)
Fed = $296,286 State = $55,680
Total salaries = $884,800
Need 33.5% of total salary for Fed taxes = $296,286
Need 6.3% of total salary for state tax = $55,680
This is “just what it is” no getting around the numbers.
Flat tax – no incentive to climb – incentive to “cheat” system to save $$
| Name | Salary | Tax rate fed | Tax fed | Tax rate state | Tax state | Net Salary | % of salary keep |
| Timmy | 20,800 | 33.5% | 6,968 | 6.3% | 1,310 | 12,522 | 60.2% |
| Tommy | 52,000 | 33.5% | 17,420 | 6.3% | 3,276 | 31,304 | 60.2% |
| Tammy | 104,000 | 33.5% | 34,840 | 6.3% | 6,552 | 62,608 | 60.2% |
| Toni | 208,000 | 33.5% | 68,680 | 6.3% | 13,104 | 126,216 | 60.2% |
| T-Bone | 500,000 | 33.5% | 167,500 | 6.3% | 31,500 | 301,000 | 60.2% |
Fed = $295,408 State = $55,742
Dennis Tax
Adjust rates for a descending scale – reward success – no incentive to cheat system, the less I make the greater % I pay in, keep less % wise
| Name | Salary | Tax rate fed | Tax fed | Tax rate state | Tax state | Net Salary | % of salary keep |
| Timmy | 20,800 | 40% | 8,320 | 7% | 1,456 | 11,024 | 53% |
| Tommy | 52,000 | 39.5% | 20,540 | 6.75% | 3,510 | 27,950 | 53.75% |
| Tammy | 104,000 | 39% | 40,560 | 6.5% | 6,760 | 56,680 | 54% |
| Toni | 208,000 | 38.5% | 80,080 | 6.25% | 13,000 | 114,920 | 55.25% |
| T-Bone | 500,000 | 38% | 190,000 | 6.0% | 30,000 | 280,000 | 56% |
Fed = $339,500 = surplus over original by $27,620 -> Put towards education credits for earners less than 50K, other assistance? Can give Timmy a $5,000-housing allowance – and still be over budget by +20k
State = $54,726 – need to tweak the numbers a bit. You get the idea…
The more you succeed the more you will pay – no getting around that – BUT!! The more you earn the more of YOUR money percentage wise – YOU GET TO KEEP…
Little reason to cheat the system – you want to show the higher earnings and keep the greater % of your money..
