Logarithmic Taxation Beyond 80%

Previously, we have tackled tax rates on individuals with income taxes up to ten thousand times the minimum wage. Pegging the maximum tax rate at 80% is crucial because further progressing would eventually lead to a tax rate of 100%. However, there is a way to continue making progressive taxation beyond ten thousand times the minimum wage.

For any person earning more than ten thousand times the minimum wage, the tax rate is automatically 80%. However, the remaining income would be subject to another tax described in this formula:

Second Tax Rate = [20 * log (A/2000M)]%, where

• A = net income after taxes
• M = minimum wage
• The calculated value is rounded down to the lower tenth of a percent

Here, 2000 was used as the coefficient for M because that would be the net income after tax of someone earning ten thousand times the minimum wage, which is the minimum value to obtain a tax rate of 80%.

Let us look at someone earning ten thousand times the minimum wage ($100,000 at $10)

Tax Rate = [20 * log (100000/10)]%

= (20 * log 10000)%

= (20 * 4)%

= 80%

Net Income After Tax = 100000 – (0.80 * 100000)

= $20,000.00

Second Tax Rate = [20 * log (20000/20000)]%

= (20 * log 1)%

= (20 * 0)%

= 0%

It can be seen that someone earning exactly ten thousand times the minimum wage will not be subject to the second tax rate. Let us now look at someone earning one million times the minimum wage ($10,000,000):

Tax Rate = 80%

Net Income After Tax = 10000000 – (0.80 * 10000000)

= $2,000,000.00

Second Tax Rate = [20 * log (2000000/20000)]%

= (20 * log 100)%

= (20 * 2)%

= 40%

Net Income After Second Tax = 2000000 – (0.40 * 2000000)

= $1,200,000.00

Even with an additional 40% second tax on top of the 80% tax, less than 90% of income was deducted, and a large sum of money is still kept.

Yet at sufficient quantities, the second tax rate can approach 80% and it has to be pegged there again. A third tax rate can be introduced in the same manner:

Third Tax Rate = [20 * log (A/4000000M)]%, where

• A = net income after taxes
• M = minimum wage
• The calculated value is rounded down to the lower tenth of a percent

Let us look at a person earning an improbable one billion times the minimum wage ($10,000,000,000):

Tax Rate = 80%

Net Income After Tax = 10000000000 – (0.80 * 10000000000)

= $2,000,000,000.00

Second Tax Rate = 80%

Net Income After Second Tax: 2000000000 – (0.80 * 2000000000)

= $400,000,000.00

Third Tax Rate = [20 * log (400000000/40000000)]%

= (20 * log 10)%

= (20 * 1)%

= 20%

Net Income After Third Tax = 400000000 – (0.20 * 400000000)

=$320,000,000

Here, so much money has been taxed, but $320,000,000 was still kept, which is 32,000,000 times the minimum wage.

If a person earns a googol or even a googolplex times the minimum wage, this recursive pegging at 80% and constant reapplying of the logarithmic formula will work because nobody is every taxed at 100%. All net incomes after all taxes will always increase. Hence, this system of taxation is progressive until infinity.