**5. Conclusions**

Five guiding principles have been developed for a pragmatic income tax system that generates revenue for the governmen<sup>t</sup> while providing basic welfare, and encourages households across the income spectrum to accumulate wealth. These principles limit the way in which governmen<sup>t</sup> redistributes wealth, but the details of implementation are left to public policy. These principles lead to a mathematical framework describing a family of tax systems based on a small parameter space where the parameters are informed by the state of the economy. A prototypical victory tax system was created that shows the feasibility of a holistic paradigm for a poverty-free and productive society without disproportional or excessive tax burdens. To highlight the effect of the constraints imposed by the mathematical framework, four key features of the victory tax are summarized.


The victory tax makes it easy for taxpayers to calculate tax liability, collect governmen<sup>t</sup> transfer when needed, and for governmen<sup>t</sup> to set tax rates that will generate the projected revenue to cover its expenditures. While the victory tax cannot prevent runaway deficits, the adjustable tax rate provides the governmen<sup>t</sup> with a means to control debt, which is an important factor in setting the single tax rate. The constraints within the tax system make public policy objectives transparent, suggesting that policy debates will become meaningful for the typical taxpayer. This is because governmen<sup>t</sup> assistance, either through direct transfers or deductions, offer incentives for households to take advantage of the victory tax system out of rational self-interest. As low-income households accumulate wealth, society's standard of living can rise significantly, suggesting that the middle class will be the dominant segmen<sup>t</sup> of the population.

**Supplementary Materials:** The following are available online at https://www.mdpi.com/1099-430 0/23/11/1492/s1, Figure S1: Lorenz curve for economies A and B; Figure S2: Systematic series of log-normal distributions as middle class size increases; Figure S3: Lorenz curve for the systematic series of log-normal distributions; Figure S4: Average tax rate from the US congressional budget office; Figure S5: Effective tax rates for economy B for illustrative set of parameters; Figure S6: Effective tax rates for economy B for additional parameter combinations; Figure S7: victory tax rate and average effective tax rate for economy B; Figure S8: After-tax income for economy B; Figure S9: Effective and victory tax rates for economy B; Figure S10: effective tax rate for low poverty line; Figure S11: effective tax rate for high poverty line; Figure S12: After-tax income comparisons for different types of tax systems. A separate zipped file contains a C++ program to generate the results, and data files from the US governmen<sup>t</sup> used to obtain tax and poverty information.

**Funding:** This research received no external funding.

**Acknowledgments:** I thank Yihuan Song, a Charlotte Research Scholar from the Belk College of Business in assisting me to obtain the publicly available information on US federal taxes and poverty data.

**Conflicts of Interest:** The author declares no conflict of interest.
