FT 30.6 - Commonwealth Budget FY2024

[KoopaDaQuick 🇵🇸]

COMMONWEALTH BUDGET
for the fiscal year of 2024

I. REVENUES

☞ Income Tax: $141,458,440,106
$0K – $125K (0%): $0
$125 – $200K (5%): $4,544,572,163
$200K – $1M (15%): $51,494,832,936
$1M – $10M (30%): $45,459,789,567
$10M – $100M (45%): $30,242,234,007
$100M+ (60%): $9,717,011,433

☞ Corporate Taxes: $222,721,286,871
$0 – 100K (0%): $0
$100K – 1M (20%): $1,052,287,645
$1M – 10M (40%): $7,087,226,512
$10M+ (60%): $214,581,772,714

☞ Excise Taxes: $34,984,493,310
Alcohol (15%): $13,087,791,871
Gas & Diesel ($0.30/gallon): $14,653,207,484
Tobacco (40%): $7,243,493,957

☞ Misc. Taxes and Penalties: $249,838,957,800
Fremont Carbon Taxation Act: $31,011,738,620
Green Vehicle Promotion Act § 2(ii): $3,602,574,479
Royalties Act:
Coal: $2,877,687,513
Gas: $1,500,722,750
Oil: $11,355,570,000
Gaming Tax: $5,100,495,700
Estate Tax (50%): $5,852,884,365
Drug Tax: $3,446,083,796
Lodging Facility Sales and Use Tax: $5,091,240,579.71
Property Tax: $180,000,000,000

☞ FY2020 Surplus: 18,159,573,897

II. EXPENDITURES

☞ Tax Credits: $1,660,474,443
Green Vehicle Promotion Act §2(i): $1,236,935,443
Teacher's Tax Credit: $423,539,000

☞ Mandatory Spending: $234,334,970,000 (List A)

☞ Discretionary Spending: $395,932,000,000
Education: $195,282,000,000
Health and Human Services: $130,676,000,000
Justice: $16,921,000,000
Home Office: $53,053,000,000
Green Vehicles Promotion Act of 2022: $2,000,000,000


TOTAL REVENUES: $667,162,752,000
TOTAL EXPENDITURES: $633,927,444,400
TOTAL SURPLUS: $33,235,307,600

SPONSOR: SCOTT OF WYOMING
OCCUPYING EMERGENCY SLOT E

Felt like using one of the emergency slots since this is probably one of the more important things on our agenda, and I wanna get it out of the way to avoid shutdown via procrastination. I don't recall having done extensive work on the budget, so I'll let the other members take the lead here.

[Mad Deadly Worldwide Communist Gangster Computer God]

I mentioned a couple times in my campaign that I wanted us to reexamine the tax code. The way that the current code works has simply never been adequately explained. Frémont's tax advantage is that, unlike Lincoln and the South, we have no SALT taxes. Our disadvantage is that the regional income and corporate taxes, when combined with federal rates, are still higher. This has been mentioned before and the only response I think I ever got from that was from YE - who is no longer active - simply saying "the tax code doesn't work that way" without going into any detail. So I don't know how much realism there is to all of this, and I'm fairly certain there's not much. But while I'm not a simp for rich people or corporations, I also question if the current rates combined with the federal rates are sustainable for any economy.

I played with ChatGPT the other night to experiment with rate reductions as it pertains to our surplus. If we were to use 90% of the surplus without accounting for any new spending, for example, taxes could be slashed be a fair amount. (I say that with the caveat that ChatGPT may or may not be the best tool, but since the budget is the most tedious, confusing, and least-sexy part about Atlasia, if there's one thing AI should be used for it's this).

[Mad Deadly Worldwide Communist Gangster Computer God]

Here's where things stand now.

I have asked ChatGPT to provide its own estimates, in place of figures that Parliament did not provide, to estimate the current surplus. Note that I did not account for the Surplus Economic Relief Act, because I would prefer to repeal that law (we already have the federal CUBI for low-income people) and simply experiment with the surplus figures we are left with.

So, here's what changed in the last year without accounting for this law:

Expenditures:
i. Nā Lāhui ʻOiwi Act: $30 million in its first year of implementation, $12 million annually for the next four years and $2 million annually after the conclusion of five years
ii. Fur Farming Ban Act: $500,000,000
iii. Huckleberry Act: $50 million
iv. AEDS in Schools Act: $20 million
v. Frémont Afforestation and Reforestation Act: $3.5 billion dollars shall be spent over the next 10 years
vi. Electric Schoolbus Act: $5 billion
vii. More Access to Contraceptive Devices Act: $10 million

Revenue:
i. Nā Lāhui ʻOiwi Act: A business operating in the Commonwealth of Frémont with annual net profits exceeding $500 million which does not increase the median wage and salary for its employees at a level which at least matches the annual rate of inflation shall be subject to a tax of 90% on all profits exceeding $500 million.
ii. Luxury Car Tax Act: 10% on cars priced over $100,000 and cars on or lower than 17 MPG in the city.
iii. Ivory Towers Taxation Act: 2% tax on the investment earnings of any private college or university in the Commonwealth of Frémont that has at least 500 tuition-paying students and net endowment assets of at least $1,000,000 per student; 70% tax on the profits of all for-profit higher education institution

Per ChatGPT: the remaining surplus is $33,235,307,600.

Next I asked the bot to redistribute 90% of the surplus under new income/corporate taxes:

Proposed New Income Tax Rates:

    $0K – $125K (0%):
        Remains unchanged.

    $125K – $200K (3%):
        Reduced from 5% to 3%.

    $200K – $1M (12%):
        Reduced from 15% to 12%.

    $1M – $10M (25%):
        Reduced from 30% to 25%.

    $10M – $100M (40%):
        Reduced from 45% to 40%.

    $100M+ (54%):
        Reduced from 60% to 54%.

Proposed New Corporate Tax Rates:

    $0 – 100K (0%):
        Remains unchanged.

    $100K – 1M (18%):
        Reduced from 20% to 18%.

    $1M – $10M (36%):
        Reduced from 40% to 36%.

    $10M+ (56%):
        Reduced from 60% to 56%.

Remaining surplus: $2,991,177,684

So, hardly a dent in the tax burden really. And this is only if we repeal the Surplus Economic Relief Act.

I would like comments from other Members. Sadly, it doesn't look like we can afford to lower taxes that much even though the current figures wouldn't be economically sustainable IRL. The alternative is either a massive deficit or cuts elsewhere.

[Mad Deadly Worldwide Communist Gangster Computer God]

*cough*

[Mad Deadly Worldwide Communist Gangster Computer God]

Seriously, if no one has any comment I'll just submit an amendment repealing the aforementioned law and redistributing 90% of the surplus. That's kind of something I would expect resistance to. But we need to change things if we want anything close to a realistic tax code (which again, combined with federal taxes, means they will still be quite high).

[KoopaDaQuick 🇵🇸]

*cough*

i'm sorry bro lmao i've got adhd, nvld, kfc, lgbt, all of the disorders

Anyways, did we take into account the money we spent on aid for the wildfires in Maui?

[Mad Deadly Worldwide Communist Gangster Computer God]

*cough*

i'm sorry bro lmao i've got adhd, nvld, kfc, lgbt, all of the disorders

Anyways, did we take into account the money we spent on aid for the wildfires in Maui?

Unfortunately I overlooked it, so no. I'll have to redo the math.

[Goldwater]

Wow, those taxes really do seem unreasonably high. That 90% redistribution is at least a start, I guess. We should probably also look into into the possibility of cutting spending somewhere,  although I honestly have no clue where to start with that. Are there any federal welfare programs that could be making some of our spending a bit redundant?

[Mad Deadly Worldwide Communist Gangster Computer God]

Sorry, folks. I forgot to post List A:

List A.
Mandatory Spending.

PAACCA		$600,000,000
TILE		$405,000,000
PPDA		$500,000,000
Earthquake Act		$50,000,000
FremontConnect		$1,000,000,000
LFTR		$5,000,000,000
IPA		$50,000,000
Park Act		$750,000,000
Bank of Fremont Act		$1,540,457
Fremont Promise Act		$3,350,000,000
Urban Act		$250,000,000
Green Act		$20,000,000,000
Warren Act		$618,750,000
Mann Act		$150,000,000,000
Fremont Drug Tolerance and Prevention Act		$55,000,000
Climate Change Act		$1,000,000
Fremont Infrastructure Enhancement Act		$3,000,000,000
FremontConnect Extension Act		$10,000,000,000
Better Interchanges for Fremont Act		$500,000,000
National Guard Funding Act		$2,000,000,000
Fremont Rural Hospitals Act of 2019		$200,000,000
Korean Wars Memorial Act		$5,500,000
Pacific Railway Reauthorization Act		$10,298,400,000
Nebraska and Iowa Flood Relief Act		$250,000,000
Fremont Healthy Lungs Act		$1,500,000
Fremont Farm Bill of 2019		$5,000,000
Park II		$100,000,000
Frémont Missing Persons and Tribal Nations Act		$1,500,000
Alaska Permanent Fund Bailout Act		$444,000,000
Prison Reform Package		$500,000
Commonwealth Fuel and Power Act		$20,000,000,000
Medical Price Control Act		$5,500,000
Frémont Emergency Schooling Act		$17,000,000
Public Transportation Expansions/Connections Act, as amended		$12,000,000,000
Basic Income Guarantee Pilot Program		$950,000,000
Frémont Higher Education Reform Act		$30,000,000
Feed Frémonters Act		$0
Right to Bear Arms Act		$4,832,720,000
Green Futures Act		$350,000,000
Public Safety Act		$4,000,000
PHAT TUSH		$3,500,000
Fremont Homeless Integration With Lasting Permanence Act		$1,200,000
Fremont Healthy Soil Act		$15,000,000
Fremont Safe Seniors Act		$6,425,000
Covid Vaccine Promotion and Distribution Act		$2,100,000,000
Fremont Parks and Recreation Act		$50,000,000
Rural Health Act		$2,000,000,000
Fremont Reading Act		$17,004,000
Climate Preparedness and Response Act		$750,000,000
Keep Feeding Fremonters Act		$100,000,000
Fremont Small Business Network Act		$500,000,000

Wow, those taxes really do seem unreasonably high. That 90% redistribution is at least a start, I guess. We should probably also look into into the possibility of cutting spending somewhere,  although I honestly have no clue where to start with that. Are there any federal welfare programs that could be making some of our spending a bit redundant?

Repealing the Surplus Economic Relief Act is one of those things since we already have the federal CUBI, but this is the previous Mandatory Spending list which will need to be amended and updated.

[Mad Deadly Worldwide Communist Gangster Computer God]

Also, in the interest of fairness, this is what YE said about the taxes:

The top bracket applies to like 500 people and we literally had that top bracket since I was FM. They don’t even pay 100% of their income because it’s not how taxes work.

The surplus stems from the fact that years ago nothing was spent in the region and only taxes were collected I believe.

YE doesn't post anymore but this is what I was referring to earlier. But if the region really was just collecting taxes for no reason over the years, we can't say that giving that money back in the form of investments, programs, and tax cuts is not justified. But people making $125K pay no more than a 5% tax to the region and no taxes to state and local government. Everyone making less than that doesn't pay any taxes at all.

[KoopaDaQuick 🇵🇸]

Also, in the interest of fairness, this is what YE said about the taxes:

The top bracket applies to like 500 people and we literally had that top bracket since I was FM. They don’t even pay 100% of their income because it’s not how taxes work.

The surplus stems from the fact that years ago nothing was spent in the region and only taxes were collected I believe.

YE doesn't post anymore but this is what I was referring to earlier. But if the region really was just collecting taxes for no reason over the years, we can't say that giving that money back in the form of investments, programs, and tax cuts is not justified. But people making $125K pay no more than a 5% tax to the region and no taxes to state and local government. Everyone making less than that doesn't pay any taxes at all.

This could be a great excuse to invest in our infrastructure specifically. Maybe more railroads, re-paving the interstates, renovate decaying old buildings, etc.

[Mad Deadly Worldwide Communist Gangster Computer God]

So what do we want to do here as far as the surplus is concerned? I don't find our tax rates realistic but I also don't think it would make sense to use 90% of the surplus for very modest reductions which mostly affect the rich -- since you don't pay any taxes if you make less than $100K.

[Attorney General, Senator-Elect, & Former PPT Dwarven Dragon]

I believe what YE was referring to is that income tax rates (FTR, this applies to both personal and corporate income, although I will focus on personal for simplicity) are relative. One's entire income is not taxed at the top rate to which they would apply, instead how it works is that, according to your current law, the initial $125K is taxed at 0%, so everyone keeps their first $125K. Then the next 75K, the Government takes 5% of that. The next 800K, the Government takes 15% of that, and so on. At the top rate, the Government takes 60% of any income in excess of 100M. Because only the top portion of the income is taxed at the 60% rate, the effective taxation rate for income as a whole is less.

This has always been how progressive income taxation works, and that is part of why the millionaires of the 1950s did not actually pay 90% of their entire income in taxes despite a top tax rate of that level (The other reasons are tax deductions/credits and tricks like sending money over to the Cayman Islands, but that's a separate issue).

However, according to the latest federal budget (SB 117-5), the federal government takes 50% of all income in excess of 441 Thousand. Therefore, combining the regional and federal rates, the top tax rate is 110% for income in excess of 100M. So under current law, Fremont actually has an effective ultramillonaire ban, so powerful that it requires paying taxes from leftover money already taxed at a lower bracket. It's not much better just below - combined, the regional and federal governments take 95% of all income from an individual's ten million dollars mark to their hundred million dollars mark. From 1M to 10M, the combined rate is 80%. From 441K to 1M, the combined rate is 65%. From 413K to 441K, the combined rate is 60%. From 210K to 413K, the combined rate is 53%. It finally drops below 50%, to 46%, from 200K to 210K. Given how high a % of an ultra-millionaire's income is in these top brackets, it is true that such individuals are giving a clear supermajority of their income to either the region or the federal government, although it is not literally 100% or 110% for their income as a whole (and especially not the case if we were to take into account any tax deductions or credits for which an individual may qualify).

For comparison, the combined Lincoln and Federal tax rates add up to just 75% for income in excess of 490K. From 441K to 490K, the combined rate is 65%. From 413K to 441K, the combined rate is 60%. From 250K to 413K, the combined rate is 53%. At 210K to 250K, the combined rate is already down to 43%. Instead of prohibitively high income tax rates, Lincoln relies heavily on property tax along with an array of "sin taxes". Of course, since states in Lincoln are free to levy their own income tax (although presumably NH still does not do so in this universe), the top division of a half-millionaire or more's income is probably subject to something in the neighborhood of an 85% combined rate, varying depending on their state of residence. But in no case should a 110% rate like is possible in Fremont be reached.

It's worth noting that as recently as November of 2021, income in excess of 1 Million had a combined 95% rate in Lincoln, not including any state and local taxes, and the property tax in addition to that. In addition, Lincoln had a wealth tax as recently as September 2022. When you added everything up, the ultra-rich had taxes due of well over 100% on "net worth exceeded by 0.1% of the population of Lincoln", and likely still over 100% on income from 1M to said net worth metric.  A slate of left-leaning Governors and LCs/LGCs of varying ideologies recognized this was unsustainable by abolishing the wealth tax and gradually decreasing standard income taxes to the levels in place today. Fremont should do the same.

[RC (a la Frémont)]

 I've been trying to make heads and tails of this for a bit now, here are some thoughts:

On current mandatory spending:

*The Alaska Permanent Fund Bailout Act was seemingly meant to be a stopgap according to Truman's words, there may be reason to cut bait there and find a solution sooner than later. The fund seemingly still holds its value four budgets deep, so tapering it a bit ought not to be drastic by any means.

*How has the Basic Income Guarantee program worked so far? Has there been enough incentive to continue this program? With the most recent report of unemployment rising to 5.3%, there might be reason to scale it back for those not actively seeking employment (Teir I in the legislation). I don't imagine the legislation aimed to create social security for those able but unwilling to work.

I know this would probably all require amendment of the original legislation, but wanted to bring them up.
Other:

*Open to increasing general discretionary spending on both Education and Health and Human Services, perhaps also the Teacher's Tax Credit.
*Would like to see the top corporate tax rate more or less unchanged, but otherwise fine with the Speaker's proposed lowering of the tax brackets.

I'm no financial wizard, let alone a math wiz, more or less trying to propose ideas here.

[RC (a la Frémont)]

Suppose I should bump this.

[Mad Deadly Worldwide Communist Gangster Computer God]

Yeah, we probably shouldn't address tough decisions by ignoring them.

Perhaps this is an opportunity to consider some devolution to the states? This would involve cutting expenditures and giving states more say over how their tax dollars are used. Keep in mind that this "single taxation" system was made with the explicit intent of simplifying and lowering the tax system for people. While it may sound better, people in other regions enjoy a lower tax burden.

[Goldwater]

So, uh, what are we doing here?

[YE]

The tax rates here are basically like 1950s tax rates irl.

Please check and make sure the bills are in column A all annual expenses.