New tax idea: income tax discount

[Larry the Cacodemon]

In Iceland where I live, we don't have a progressive income tax system. Instead, we have this thing that is called "persónuafsláttur", which in english would translate into "person discount". Basically how it works, is that there is a single income bracket (a flat income tax) and then everybody regardless of income level gets a flat money discount of their tax. To create an example:

1. Let's say there is a flat 50% income tax.
2. Let's say that the person discount is 500 dollars.
3. Let's say that Bob makes 3000 dollars a month.
4. Then Bob has to pay 1500 dollars according to the 50% tax.
5. But then he gets a 500 dollars person discount, reducing his tax to only 1000 dollars.
6. This means that while the tax is technically 50% he is only paying 33% post-discount.

The reason for why I think this system is better than the progressive tax is that it accomplishes the same thing (the fact that everyone gets the same discount means that people with lower incomes pay a lower post-discount tax rate than the wealthy) as the progressive tax but in a manner that is more simplistic (no extra tax brackets needed) and thus I would like to see this in the game.

Thoughts?

[Gikgik]

The description of the "Income Tax" policy is a bit fuzzy; implicitly, it is a progressive income tax, but as a player, you cannot set the brackets of progressivity.

Also, the Flat Tax and Income Tax are overpowered when used together.

The income tax system should be re-done from the beginning. It could be done through three policies:
* Flat Income Tax: As it is now.
* Upper Tax Bracket: Higher income tax rate for the wealthy. Angers wealthy people and capitalists. Causes Brain Drain.
* Earned Income Tax Credit: As described above. Increases income for the poor, and somewhat for those with middle income.

[toad_004]

It also makes no sense that flat income tax and [progressive] income tax have the same income values.

In game, it is implied that the setting of the progressive income tax slider is what the richest 1% are being charged (ex: the default setting of USA's tax slider is at 34%, which was the highest bracket at the time the game was made). Therefore, it should earn less income than a flat tax of 34%, because a flat tax means EVERYONE is paying that amount, not just the top 1%.