Zero income tax under $150,000

2026-11-04 · universal social security, taxes, national

ThesisSet the income tax rate at zero for the first $150,000 a person earns, and almost nobody pays income tax or files a return again. Above the floor, tax all income alike (wages, gains, dividends, interest, and the Social Security deposit itself) at steep rates: 40, 50, 65 and 75 percent. The floor is high so ordinary life is tax-free; the base is broad so the floor is affordable. As machines take on the work, the tax shifts from paychecks to corporate profits, which is where the income goes.

Your bank keeps a running total of your income for the year. Below the floor, nothing happens. The day you cross it, withholding starts at 40 percent on what comes after. There is no form.

Your income this year Zero-tax floor Year (for the deposit)

Income tax you owe

—

Effective rate

—

on all income, including the deposit

You keep, with the deposit

—

The schedule

Income per person	Marginal rate	Who it reaches
Up to $150,000	0%	About 95 percent of adults. No return, no withholding.
$150,000 to $400,000	40%	High professionals; small-business owners above their own threshold.
$400,000 to $1 million	50%	Executives, partners, large practices.
$1 million to $10 million	65%	A small fraction of a percent.
Above $10 million	75%	A few thousand returns.

The floor is per person ($300,000 for a couple). The Social Security deposit counts toward it, because excluding it is a second exemption, and exemptions are what shrink a tax base until it pays for nothing. The first version of this design taxed only income above $150,000 and exempted the rest from the base; it raised about $1,500 per adult. The base has to be everything; the relief comes from the zero rate.

Why the tax shifts from paychecks to profits

If machines do 65 percent of the work by 2045, wage income falls as a share of the economy, and so does a tax on wages. The same income lands as profit on corporate books. The model halves the wage-tax base by the machine share and grows the corporate tax with it (4 percent of GDP at launch). Together they hold steady; the mix changes completely. A design that leaned on wage taxes alone would collapse as the work moved to machines.

What could go wrong

Rates of 65 and 75 percent invite avoidance; the model nets 15 percent off, in line with the tax-gap research³, and real-time withholding closes only the domestic channels. State income and sales taxes conflict with the promise of a tax-free life below the floor. And whether small businesses are measured on revenue or profit is still open.

Sources (3)

Individual Income Tax Returns, Publication 1304 — Internal Revenue Service, Statistics of Income · original · distribution of income by bracket; roughly 95 percent of adults have income below $150,000. Not yet locked.
Federal receipts by source, historical tables — Office of Management and Budget · original · individual income tax about 8 to 10 percent of GDP today; the model's 27 percent is what this schedule raises on a base that includes every kind of income. Not yet locked.
The tax gap — Internal Revenue Service · original · basis for the 15 percent avoidance netted out of the model's revenue. Not yet locked.

Numbered references in the text point to this list. "Locked" means we hold a dated copy of the file on the PLACES platform so the figure can be checked later even if the publisher changes the page.