Model Run Exploratory: Parameters
- Governments = 1
- Producer Households = 100
- Consumer Households = 110
Stimulus Regime 1
USA Real-world total managed expenditure (sum to annual) data source starting 1960, ending 2018.
U.S. Bureau of Economic Analysis, Government total expenditures [W068RCQ027SBEA], retrieved from FRED, Federal Reserve Bank of St. Louis; https://fred.stlouisfed.org/series/W068RCQ027SBEA.
Stimulus Regime 2
Starting 2019, ending 2050, model stimulus will increase at a rate of 4% per annum (in every iteration subsequent to 2018).
Stimulus Distribution & Employment
At the beginning of every model run iteration all producer household agents receive an equal share of government stimulus for the period. Every producer household agent will subsequently employ (by random choice) one unemployed consumer household agent. A consumer household agent cannot be employed more than once in the current iteration. Structural unemployment is set at nine percent of the consumer household population.
Regime 1: Flat Rate Taxation
Set at 37% of all consumer agent income.
Regime 2: Marginal Taxation
A 'historical average wage' paid to all employed consumer agents is calculated in each iteration. The 'historical average wage' is used in the current iteration to apply marginal rate taxation.Marginal Rate Taxation Brackets:
- Tax Bracket 0: No tax on a wage amount up to the first 50% of the historical average wage.
- Tax Bracket 1: Pay 60% tax on any remaining wage amount that is between 50% and 100% of the historical average wage.
- Tax Bracket 2: Pay 70% tax on any remaining wage amount that exceeds 100% of the historical average wage.
Taxation Regimes Comparison
Model Iteration Historical Average Wage: 36253.103 (Previous iteration).
- Consumer agent 5 is paid 40235.84. A flat rate tax of 14887.26 would have been returned. Under marginal rate tax, 13663.85 is returned.
- Consumer agent 10 is paid 24380.53. A flat rate tax of 9020.80 would have been returned. Under marginal rate tax, 3752.39 is returned.
- Consumer agent 8 is paid 62032.38. A flat rate tax of 22951.98 would have been returned. Under the marginal rate tax, 28921.42 is returned.
Consumer Agent 8 Marginal Tax Return Breakdown
50% of historical average wage amount at iteration 6: (36253.103 / 2) = 18126.55
- No tax on wage amount up to the first 50% of the historical average wage amount.
- Tax on wage amount that is between 50% and 100% of the historical average wage amount (18126.55 * 60%) = 10875.93
- Tax on wage amount that exceeds 100% of the historical average wage amount ((62032.38 - 36253.10) * 70%) = 18045.49
- Proportion of disposable income: 60%
- Proportion of (agent wealth) at the opening of the period (quarter): 40%