Compound Tax Plan Act 2025
Compound Tax Plan Act 2025
Passed on the 1st of March 2025
Preamble
Whereas it is in the best interest of the people that the SimDemocracy government becomes financially self-sufficient;
Whereas the SimDemocracy economy is primed for growth and value-creation;
Whereas the people must be able to rely on future social and government programs not requiring the inflation of the money supply.
Article 1: Definitions
§1. “Taxable Income” shall refer to any income from wages paid to employees from employers that is eligible for taxation.
§2. “Tax Period” shall refer to a time period of seven (7) days where all Taxable Income produced within such period shall be taxed according to the Income Tax Rate. The start of the Tax Period shall coincide with the term of the Senate, as provided in Article 3 § 1 of the Constitution, upon every other Tax Period.
§3. “Personal gift” shall refer to any donations which are not definable as a contract according to Articles I and IX of the Commerce Actualizations Act.
§4. “Income” shall refer to any wages collected by an employee from an employer.
§5. “Individual” shall refer to any singular person and should not be confused with any special account, business, or organization in SimDemocracy.
Article 2: Income Tax Rate
§1. This Act will establish six progressive tax brackets on all income earned by all peoples from activities in any digital space within the jurisdiction of SimDemocracy. The tax brackets shall be shown in Appendix A for reference.
- §1.1. Any income up to one hundred (100) Tau of income collected during the Tax period will be exempt from taxation.
- §1.2. Any income between one hundred and one (101) and two hundred (200) Tau shall be taxed at a rate of five percent (5%).
- §1.3. Any income between two hundred and one (201) to two hundred fifty (250) Tau shall be taxed at a rate of ten percent (10%).
- §1.4. Any income between two hundred fifty-one (251) and three hundred fifty (350) Tau shall be taxed at a rate of fifteen percent (15%).
- §1.5. Any income between three hundred fifty-one (351) and four hundred fifty (450) Tau shall be taxed at a rate of twenty percent (20%).
- §1.6. Any income including and/or beyond four hundred fifty-one (451) Tau shall be taxed at a rate of twenty-five percent (25%).
§2. Any transactions reasonably made as personal gifts shall be exempt from this tax.
- §2.1. Any transactions not performed as payment income as defined in Article 1 of this Act shall be exempt from this tax.
Article 3: Wealth Tax Rate
§1. Any user which has not sent any messages in any SimDemocracy server channels for 60 days shall be deemed to be an “inactive user.”
§2. A progressive wealth tax shall be levied on individuals specified in Section 3 of this article whose total assets exceed 250 Tau.
- 3% for wealth between 250 and 749 Tau.
- 5% for wealth between 750 and 1999 Tau.
- 7% for wealth exceeding or consisting of 2000 Tau.
§3. This progressive wealth tax shall be levied only upon all inactive users, rightfully designated pursuant to § 1 of this article.
Article 4: Payment of Taxes
§1. All taxes shall be withheld by employers upon payment of wages to employees.
§2. All taxes due to be paid according to the Income Tax Rate shall be paid by the end of each Tax Period.
§3. All taxes shall be paid to the Government Reserve account.
§4. The Department of Treasury shall publish a tool for individuals and businesses to use in the calculation of taxes to be paid to the Treasury.
§5. The Central Revenue Board shall be charged with enforcing the collection of taxes and given the appropriate moderative powers to perform such charge.
Article 5: Penalties
§1. In the event that any taxable income is not taken from the employee’s paycheck for any reason, the penalty shall be assessed based on the severity of the incursion by the appropriate SimDemocracy court of law.
§2. Any penalty or fine may be appealed in the appropriate SimDemocracy court of law.
Article 6: Implementation
§1. This Act shall take effect immediately upon passage
§2. The first Tax Period shall start upon the start of the term of the 137th Senate.
Appendix A: Illustration of the Article 2 Tax Brackets
| Tax Bracket Number | Weekly Income Range | Marginal Tax Percentage |
|---|---|---|
| 1 | 0-100 | 0% |
| 2 | 101-200 | 5% |
| 3 | 201-250 | 10% |
| 4 | 251-350 | 15% |
| 5 | 351-450 | 20% |
| 6 | 451+ | 25% |
