# Model Run Exploratory

## Population

• Government Agent = 1
• Producer Agents = 100
• Consumer Agents = 110

Structural unemployment is set at nine percent of the consumer population.

### Expenditures Regime 1 (1960 - 2020)

USA Real-world total managed expenditure (sum to annual) data source starting 1960, ending 2020.

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.

### Flat Rate Taxation

Set at 37% of all consumer agent income.

### Expenditures Regime 2 (2021 - 2050)

#### Marginal Rate Taxation

Government agent funding of producer agents will increase at 4% per annum (in every step that follows 2020).

A 'historical average wage' is calculated in each iteration. The 'historical average wage' is used in the current iteration to apply marginal rate taxation.

Marginal Rate Tax 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 Comparison Example

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

### Consumption function

• Proportion of disposable income: 60%
• Proportion of (agent wealth) at the opening of the period (quarter): 40%

Chart links will open a new tab. Charts not updated.

#### Marginal Taxation

View abmsim accounting.