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WAGE FLOORS

AS TAX ARCHITECTURE

Aligning Tax Liability with the wage floor

An intuition that points at something real,

the math that constrains it,

and the modified version that could work.

A Tax Architecture Concept Document

Jason Robertson

v1.5 · Created April 2026 · Updated May 6, 2026 for v2.19 (Wealth Surcharge framing) · Updated May 6, 2026 for v2.27.6 (FUTURE-TENSE-DONE: replaced 'future platform versions will provide' language with canonical OPEN-2 architecture per v2.26.3 resolution) · Updated May 6, 2026 for v2.30.1 (combined revenue projection refined to ~$225B per item 81 v2.30 substantiation) · Updated May 6, 2026 for v2.30.29 (RESEARCH-3 disemployment sensitivity analysis added)

Ohio · 2026

Sources Baseline. Numerical claims in this document derive from the canonical sources cataloged in 05_Sources_And_Derivation_Convention.docx, including: IRS Statistics of Income 2023 baseline (filer counts and adjusted gross income distributions); BLS Current Population Survey wage data 2023-2024; Treasury Department revenue projections (the $2.4 trillion individual income tax revenue baseline). Wage floor calibration figures and aggregate income above floor calculations are derivational from these inputs.

The Question Behind This Document

During the platform's development, a question emerged that the original architecture didn't directly address: what if each occupation's wage floor also defined the federal tax liability for workers in that occupation? What if the same number that establishes the minimum wage also establishes the maximum tax obligation, or the threshold below which no federal income tax is owed? Would this encourage adoption of the wage floor by giving every worker in the occupation a direct stake in seeing the floor raised?

This is a structurally interesting proposal. Most tax policy treats taxation and wage policy as separate domains — wages are determined by labor markets and minimum-wage law, while taxes are determined by income brackets and deductions that operate independently of wage structure. Connecting them would be unusual but not impossible. The question is whether the connection produces useful effects without breaking the fiscal foundation that funds federal government operations.

This document examines that question honestly. The original intuition turns out to point at something real — connecting wage floors to tax liability creates powerful political incentives that the current architecture lacks. But the simplest version of the proposal cannot fund the federal government, and that fact has to be confronted before the underlying insight can be developed into a workable proposal. What follows is the analysis: what the intuition gets right, where the simple version fails, and what modifications would preserve the political value while remaining fiscally viable.

“The simplest version of this proposal cannot work. The intuition behind it points at something that can. The work is figuring out which modifications preserve the value of the intuition while solving the fiscal problem the simple version creates.”

What the Intuition Gets Right

Before examining whether the proposal works mechanically, it's worth being clear about what the proposal accomplishes that the current system doesn't. The intuition behind connecting wage floors to tax liability identifies real problems with how the current architecture handles both labor markets and tax fairness.

The Misalignment of Interests in the Current System

Under the current system, workers in any given occupation have inconsistent interests when it comes to wage floors. Workers currently below the wage floor benefit from raising it — their wages rise. Workers currently at the floor benefit modestly — their wages stay competitive but don't necessarily rise. Workers substantially above the floor have no direct interest in raising the floor at all — their wages don't change, and they may face concerns about labor market disruption from significant floor changes.

This misalignment matters politically. Wage floor proposals consistently face opposition from coalitions that include workers who are not personally helped by the floor. The opposition isn't necessarily wrong on the merits — there are genuine concerns about employment effects, regional variation, and economic disruption — but the political coalition for adequate wage floors is weaker than it could be because higher-paid workers in floor-affected occupations don't see direct benefit from supporting their lower-paid colleagues.

The intuition's insight • Connecting wage floors to tax liability would align interests across all workers in an occupation, not just those currently below the floor. • A senior engineer benefits from raising the engineering wage floor because their tax-exempt amount also rises. • A senior nurse benefits from raising the nursing wage floor because their tax-exempt amount also rises. • Every worker in every occupation gains a direct stake in seeing their occupation's wage floor at a level that reflects the work's actual value. • The political coalition for adequate wage floors expands from workers below the floor to all workers in floor-covered occupations — essentially the entire working population.

The Fairness Argument

There's also a fairness intuition embedded in the proposal that deserves articulation. The current tax system applies the same standard deduction ($14,612 for single filers in 2024) regardless of what work the taxpayer does or what that work pays. A childcare worker earning $32,000 and a software engineer earning $250,000 both get the same $14,612 deduction. The deduction's value relative to total income is much higher for the engineer than for the childcare worker, even though the childcare worker is closer to the edge of being able to afford basic life functions.

The proposal's logic suggests that the appropriate exemption should reflect what the work in a given occupation pays, not be a flat amount that ignores occupation entirely. A floor of $32,000 for childcare workers, used as their exemption threshold, means childcare workers pay no federal income tax up to the threshold of what their occupation makes possible. A floor of $80,000 for senior engineers, used as their exemption threshold, means engineers pay no federal income tax on the first $80,000 of their income because that's the threshold for adequacy in their occupation. Workers above their occupation's floor pay tax only on income that exceeds what their occupation's wage architecture establishes as adequate.

This is a coherent fairness principle, even though it differs from the principles that govern the current tax system. It says that the work itself defines the threshold of adequacy, and federal taxation should respect that threshold rather than imposing a uniform standard that ignores occupational reality.

“The current system asks all workers to start paying federal income tax above the same flat threshold. The proposal asks them to start paying federal income tax above whatever threshold their own occupation's wage architecture identifies as adequate. The second principle aligns better with the rest of the platform's logic.”

Why the Simple Version Cannot Work

Despite the appeal of the intuition, the simplest version of the proposal cannot fund the federal government. The numbers are not close. Understanding why requires looking at three possible interpretations of what “wage floor as tax liability” could mean and working through the fiscal consequences of each.

Three Possible Interpretations

Interpretation A: Wage floor as tax CAP • Workers pay normal taxes on income up to their occupation's wage floor. • Income above the floor faces no additional federal income tax. • Effect: workers in low-floor occupations who earn high incomes pay almost nothing in federal income tax. • A specialist physician with a wage floor of $80,000 and an actual income of $400,000 pays tax only on the first $80,000. • Revenue consequence: catastrophic loss, ~80% of current federal income tax disappears.

Interpretation B: Wage floor as tax BASE • Federal tax is calculated as a percentage of the wage floor itself, not of actual income. • Every worker in an occupation with a $35,000 wage floor pays the same federal tax amount, regardless of whether they earn $35,000 or $5 million. • Effect: a flat tax tied to occupation rather than income. • Revenue consequence: matches current revenue only at very high rates (40% on the floor), and produces a regressive tax structure where high-income workers in low-floor occupations pay almost nothing while low-income workers in high-floor occupations pay too much.

Interpretation C: Wage floor as EXEMPTION threshold • Income up to the wage floor is exempt from federal income taxation. • Income above the floor is taxed at normal progressive rates. • Effect: a much-larger personal exemption tied to occupation rather than a flat amount. • Workers at or below their occupation's floor pay $0 federal income tax. • Workers above the floor pay tax only on the amount that exceeds the floor. • Revenue consequence: $530B in revenue versus $2.4T currently — a $1.87T gap that has to come from somewhere else.

The Math of the Simplest Version

Interpretation C is the most appealing version of the proposal because it preserves progressivity while still giving every worker the benefit of an occupation-tied exemption. Under this version:

Working population: approximately 165 million Americans. Population-weighted average wage floor across the economy: approximately $38,000. Current effective average wage: approximately $65,000. This means the average worker has approximately $27,000 of income above their occupation's floor.

Aggregate income above floor across the economy: approximately $4.5 trillion. To replace the current $2.4 trillion in individual income tax revenue using only this base, the average effective rate on income-above-floor would need to be 54% — substantially higher than current effective rates and probably politically impossible. At more realistic effective rates (12-15%), the revenue produced is approximately $530 billion — leaving $1.87 trillion in current federal revenue with no replacement source.

What the simple version means in practice • Worker earning $25,000 (below most floors): pays $0 federal income tax. (Currently pays approximately $340.) • Worker earning $42,000 (slightly above floor of $38K): pays approximately $400 on the $4,000 above floor. (Currently pays approximately $3,068.) • Worker earning $75,000 (well above floor): pays approximately $4,550 on the $37,000 above floor. (Currently pays approximately $9,000.) • Worker earning $250,000: pays approximately $51,100 on the $212,000 above floor. (Currently pays approximately $52,000.) • Higher earners barely affected; everyone else gets substantial tax cuts; federal revenue collapses by $1.87 trillion.

“The simplest version of the proposal produces a substantial middle-class tax cut, dramatically reduces federal revenue, and leaves the federal government unable to fund the platform or anything else. It cannot work as proposed.”

What a Modified Version Could Achieve

The simple version's failure does not mean the underlying intuition is wrong. It means the implementation needs constraints that preserve the political and fairness benefits while solving the fiscal problem. Several modifications can achieve this. The most defensible version combines an exemption tied to the wage floor with phase-out at higher incomes and additional revenue from sources the current system underutilizes.

The Recommended Architecture

Modified version: wage floor exemption with phase-out • Income up to 1.5x the wage floor: fully exempt from federal income tax. • Income from 1.5x to 2.5x the wage floor: exemption phases out linearly. • Income above 2.5x the wage floor: no exemption, current progressive rates apply to all income. • Higher-earner surcharges: +5% on income above $250,000, +10% on income above $500,000, +15% on income above $1 million. • Combined with corporate rate restoration (21% → 28%) and capital gains reform for income above $1M (treated as ordinary income). • Estate tax restoration to pre-2017 levels. • Carried interest loophole closure.

How This Affects Workers at Different Income Levels

Income | Floor | Multiple | Exempt amount | Tax under modified | Tax under current | Change
$18,000 | $28,000 | 0.64x | $28,000 | $0 | $340 | −$340
$28,000 | $32,000 | 0.88x | $32,000 | $0 | $1,388 | −$1,388
$42,000 | $38,000 | 1.11x | $38,000 | $400 | $3,068 | −$2,668
$65,000 | $42,000 | 1.55x | $40,000 | $2,780 | $6,468 | −$3,688
$95,000 | $50,000 | 1.90x | $30,000 | $9,680 | $13,068 | −$3,388
$145,000 | $60,000 | 2.42x | $5,000 | $27,080 | $24,776 | +$2,304
$250,000 | $70,000 | 3.57x | $0 | $57,480 | $52,808 | +$4,672
$750,000 | $80,000 | 9.38x | $0 | $229,980 | $224,578 | +$5,402

Several patterns emerge from this analysis:

Workers below their occupation's floor pay zero federal income tax. This is a substantial change from the current system, where workers earning $18,000 still pay approximately $340 in federal income tax. Under the modified version, workers in below-floor positions are completely exempt, which both provides relief and creates the political incentive to ensure floors actually reflect occupational reality.

Workers at or near their occupation's floor see substantial tax cuts. A worker earning $42,000 with a $38,000 floor sees federal income tax drop from $3,068 to $400 — a 87% reduction. A worker earning $65,000 with a $42,000 floor sees federal income tax drop from $6,468 to $2,780 — a 57% reduction. These are working-class and lower-middle-class workers who currently bear disproportionate tax burden relative to their incomes.

Workers in the upper-middle range see modest tax increases. A worker earning $145,000 with a $60,000 floor sees federal income tax rise from $24,776 to $27,080 — a 9% increase. The phase-out has fully eliminated the exemption at this income level, and the worker pays normal progressive rates on all income. This is the price of preserving fiscal viability.

High earners see modest increases primarily from surcharges. Workers earning $250K and $750K see tax increases of approximately 9% and 2.4% respectively, driven by the higher-earner surcharges. These are real increases but not transformative — the modified version remains substantially less progressive than European tax systems while being more progressive than the current American system.

The Fiscal Math

Working through the revenue produced by this modified architecture:

Revenue source | Estimated amount
Modified income tax with floor exemption + phase-out | $1,553B
High-earner surcharges (+5/10/15% above $250K/$500K/$1M) | $62B
Corporate rate restoration (21% → 28%) | $140B
Capital gains as ordinary income (income > $1M) | $200B
Estate tax restoration | $50B
Carried interest closure | $15B
TOTAL REVENUE UNDER MODIFIED VERSION | $2,020B
Current individual income tax baseline | $2,400B
GAP REMAINING | $380B

The honest fiscal verdict • Even with all modifications, the proposal still produces approximately $380B less in federal revenue than the current system. • This is not a small gap — it represents about 8% of current federal revenue. • Closing it would require either accepting a smaller federal budget, finding additional revenue sources, or modifying the proposal further (smaller exemption, faster phase-out, higher rates above phase-out). • The platform's existing pillar funding (2% / 4% / 6% healthcare (employee / employer / combined), 0.5% / 0.8% / 1.3% childcare, 0.3% / 0.5% / 0.8% mental health, FICA continuation) is separate from this calculation and is not affected. The gap is in general federal revenue, not in platform-specific funding. • Honest implementation would acknowledge the gap and address it through one of the options above rather than pretending the math works out exactly.

“The modified version solves most of the fiscal problem but not all of it. A $380B annual gap remains. This is a meaningful trade-off that has to be acknowledged honestly: the proposal substantially shifts tax burden from low and middle-income workers to high-income workers, but does not perfectly replace current revenue.”

The Political Dynamics This Creates

The fiscal challenges are real, but the political dynamics this proposal creates are extraordinary. If implemented even in the modified form, the proposal produces a structural alignment of interests that the current tax system does not produce — and that alignment may be the proposal's most valuable feature.

Why Workers Become wage floor Advocates

Under the current system, workers earning above the minimum wage have limited direct interest in seeing the minimum wage raised. The increase doesn't affect their wages, may produce concerns about employment effects, and primarily benefits people other than themselves. This is why minimum wage politics consistently produces coalitions that include workers in the affected occupations on both sides of the argument.

Under the modified version of this proposal, every worker in every occupation has a direct personal stake in seeing their occupation's wage floor at an adequate level. A senior engineer benefits when the engineering wage floor is raised because their personal exemption amount rises with it. A senior nurse benefits when the nursing wage floor is raised because their personal exemption amount rises with it. The floor is no longer a number that affects only low-paid workers — it becomes a number that affects every worker in the occupation, with progressively larger benefits for workers earning at and just above the floor.

The new political coalition for wage floors • All workers below the floor in any occupation benefit from raising it (their wages rise). • All workers at the floor benefit (their wages remain competitive and their tax exemption rises). • All workers up to 1.5x the floor benefit fully from the higher exemption (zero federal income tax up to the higher level). • Workers between 1.5x and 2.5x the floor benefit partially from the higher exemption (phase-out range). • Workers above 2.5x the floor see no direct tax benefit, but their professional standards and labor market value are reinforced by adequate floors in their field.

This produces a coalition for adequate wage floors that includes nearly the entire working population in any floor-covered occupation. The current opposition to wage floor increases tends to come from employers facing higher labor costs and from workers in adjacent occupations worried about labor market disruption. Under the modified version, the workers themselves — across the income range within any occupation — become an active constituency for adequate floors. This is potentially transformative for the politics of wage policy.

Why This Matters for the Platform

The platform's wage floor architecture is one of its three primary pillars, but it has historically been the pillar with the weakest political coalition. Universal healthcare has support from anyone worried about medical costs (most Americans). Retirement security has support from anyone worried about retirement (most Americans). But wage floors have historically had support primarily from workers in low-wage occupations and from people who care about wage policy on principle. The political coalition is narrower than the other pillars' coalitions.

Connecting wage floors to tax liability would broaden this coalition substantially. Every worker in every floor-covered occupation — essentially the entire American workforce — would have a direct personal interest in adequate floors. The wage floor pillar's political durability would shift from “depends on continued political support for low-wage workers” to “depends on continued political support across the entire working population.” That's a fundamentally different political proposition.

The Information Architecture Effect

There's also an information architecture benefit that connects to the platform's broader emphasis on transparent decision-making. Under the modified version, workers gain a direct, transparent reason to engage with the wage floor analysis for their own occupation. They can see what the BLS (Bureau of Labor Statistics) data says about their occupation, what the 25th-percentile floor is, what their exemption would be under that floor, and how their personal tax obligation depends on the floor's adequacy. The wage floor stops being abstract policy and becomes immediate personal financial information.

This produces a positive feedback loop. Workers engage with wage floor information because it directly affects their taxes. Engagement produces political support for accurate, regularly-updated floors. Accurate floors produce both fair wages and fair tax exemptions. The information architecture becomes self-reinforcing in ways the current system doesn't approach.

“The proposal turns wage floor analysis from policy that affects other people into personal financial information that affects you. Every worker in any floor-covered occupation gains a direct stake in the analysis being accurate, current, and reflecting actual occupational reality.”

Implementation Considerations

If the modified version were to be incorporated into the platform's tax architecture, several implementation issues would need addressing. These are not show-stoppers, but they require thoughtful design rather than naive implementation.

Occupation Determination

Each worker's tax liability depends on their occupation's wage floor. This requires determining which occupation a given worker belongs to, which is not always straightforward. Some workers hold multiple roles, change occupations during the year, or work in roles that don't fit neatly into BLS occupation categories. The platform's approach should default to the worker's primary occupation as reported on their tax return, with a documented procedure for resolving ambiguous cases.

Occupation determination rules • Primary occupation defined as the occupation that produced majority of the worker's annual income. • Workers in multiple occupations during the year use the occupation with highest income as their primary. • Workers with substantial self-employment use a self-employment-specific category. • Independent contractors and gig workers use the occupational category corresponding to their primary type of work. • Disputes resolved by the IRS using the same procedures that currently handle ambiguous wage classifications.

Floor Updates and Tax Year Effects

Wage floors are updated regularly based on BLS data. Tax obligations are calculated annually. The platform's design should specify how floor changes propagate into tax obligations. The most defensible approach uses the floor that was in effect at the start of the tax year, with no retroactive adjustment for mid-year changes. This produces predictability for taxpayers and avoids end-of-year surprises.

State and Local Coordination

This proposal affects only federal income tax. State income taxes and local taxes operate on their own structures. Some states might choose to mirror the federal approach in their own tax codes; others might not. The proposal does not require state coordination but would benefit from it where states are willing to align.

Phase-In Timeline

Sudden implementation of a major tax structure change creates substantial disruption. The proposal should phase in over multiple years — perhaps three to five — with the exemption growing gradually toward the wage floor amount as workers and tax administration adapt. This phasing also allows fiscal monitoring to verify the revenue projections before full implementation, with the option to adjust if revenue falls below projections.

Tax Bracket Architecture

The platform preserves the current federal income tax bracket structure with one targeted modification. The seven existing brackets — 10%, 12%, 22%, 24%, 32%, 35%, and 37% — continue to apply, with their current thresholds (10% on the first $11,600 single / $23,200 MFJ (Married Filing Jointly) of taxable income, 12% to $47,150 single / $94,300 MFJ, and so on through 37% above $609,350 single / $731,200 MFJ as of 2024). What changes is what counts as taxable income: under the platform, the wage floor exemption replaces the standard deduction, so taxable income equals gross income minus the occupation's empirical wage floor (or sum of floors for joint filers) rather than gross income minus the standard deduction.

The bracket thresholds themselves are not modified. A worker earning $80,000 with a $50,000 wage floor has $30,000 of taxable income under the platform; that $30,000 is taxed at 10% on the first $11,600 (single) and 12% on the remainder, exactly as under current bracket structure. This preservation is deliberate. The bracket structure itself is not what the platform is reforming — the standard deduction is. Preserving brackets reduces complexity in the transition, allows existing tax software and forms to continue working with minimal modification, and keeps the platform's tax architecture innovation focused on the wage floor mechanism rather than entangling it with bracket-rate debates.

One bracket modification is part of the platform: the addition of a graduated wealth surcharge structure above the existing top bracket. The specific surcharge thresholds, rates, and revenue projections were established by the canonical OPEN-2 resolution (v2.26.3, documented in OIR (Open Issues Registry) Section 10) and implemented in the v2.27 Calculator. The architecture is three distinct mechanisms: graduated additional income brackets at +5% above $250K, +10% above $500K, +15% above $1M (single/HoH thresholds; doubled for MFJ); a small wealth surcharge of 0.5% annually above $10M net worth; and a wealth tax of 2.5% annually above $50M net worth that funds Sovereign Investment Fund corpus accumulation. Combined revenue projection from all three mechanisms is approximately $225 billion per year mature steady-state (per FFIA wealth tax architecture line as refined in v2.30; see item 81 for the full income tax architecture substantiation including behavioral elasticity sensitivity analysis and distributional impact). The income surcharge brackets are structured as additional brackets above the existing 37% top bracket rather than as modifications to the existing bracket rates themselves. The seven current brackets continue to operate as today; the surcharge brackets are layered above them for high-income taxpayers. This means a household earning $200,000 sees no bracket-rate change under the platform; only households with single-filer income above $250,000 (or MFJ income above $500,000) see additional bracket rates applied.

Filing status treatment is preserved. Single, married filing jointly, married filing separately, and head of household continue to have their distinct bracket schedules. The wage floor exemption operates within this filing status framework: a single filer's exemption is their occupation's floor; an MFJ filing has two earners' floors summed (with single-earner MFJ households assigning the floor to the working spouse and using current MFJ bracket schedules for the resulting taxable income). The platform does not modify the personal exemption (which has been $0 under current law since the 2017 Tax Cuts and Jobs Act and is not directly reformed by the platform). Itemized deductions remain available as an alternative to the wage floor exemption for taxpayers whose itemized deductions would exceed their floor exemption — typically high-income taxpayers with substantial mortgage interest, state and local taxes (subject to current SALT cap), and charitable contributions.

Interaction with Existing Tax Provisions

The current tax code has many provisions — child tax credit, earned income tax credit, deductions for retirement contributions, deductions for healthcare expenses — that interact with the standard deduction in complex ways. The wage floor exemption would replace the standard deduction but not necessarily eliminate the other provisions. Detailed legislative drafting would be required to specify how the wage floor exemption interacts with each existing provision. The default approach: provisions that currently reduce taxable income continue to do so, but they apply to income above the wage floor exemption rather than starting from gross income.

Interactions to address • Child Tax Credit: continues to apply, providing benefits beyond the floor exemption. • Earned Income Tax Credit: continues for low-income workers, providing benefits beyond zero tax obligation. • Retirement contribution deductions (401k, IRA): continue, reducing income further beyond floor exemption. • Healthcare expense deductions: continue, with treatment depending on platform's universal healthcare implementation. • Itemized deductions: continue as alternative to wage floor exemption for taxpayers whose itemized exceed the floor exemption (unlikely for most workers but relevant for high earners with substantial deductions).

Honest Limitations

This document has made the case for a modified version of the proposal that achieves most of the political benefits while substantially solving the fiscal problem. Honest acknowledgment requires noting what this case does and does not establish.

The $380B gap is real and unresolved

Even with all the modifications proposed, the modified version produces approximately $380 billion less in federal revenue than the current system. This is not a small gap. Closing it would require either accepting a permanently smaller federal government, finding additional revenue sources beyond those already incorporated, or modifying the proposal further to reduce its tax-cut effects. None of these options is politically easy. Honest implementation would have to confront the gap rather than wave it away.

Income distribution data is approximate

The revenue projections in this document use a simplified income distribution model. Real revenue under the proposal would depend on the precise distribution of incomes across occupations, the precise floor levels for each occupation, and behavioral responses (workers reorganizing their reported incomes to optimize tax outcomes) that the simplified model doesn't capture. Real implementation would require detailed modeling using IRS (Internal Revenue Service) and BLS data that this document doesn't perform. The projections here are directionally correct but not precise.

Behavioral responses could affect revenue

Tax structures shape behavior. Workers might reorganize their income recognition, employment classifications, or occupational identifications in ways that affect their tax obligations under the proposal. Some of these responses would reduce revenue further; others might increase it. Detailed modeling of behavioral responses is essential before any actual implementation, and would likely produce some adjustments to the proposal's parameters.

Political feasibility is uncertain

Tax policy changes face intense political opposition from various sources. Workers above the phase-out threshold facing modest tax increases would oppose the proposal. High earners facing surcharges would oppose more strongly. Industries dependent on specific deductions and provisions would oppose changes that affect them. The political coalition for the modified version is real but not guaranteed; the proposal would face substantial political resistance even with its broad working-class appeal.

Interaction effects with platform pillars need detailed design

The platform's other pillars have their own funding mechanisms (healthcare contribution at 2% employee + 4% employer = 6% combined, childcare at 0.5% employee + 0.8% employer = 1.3% combined, mental health at 0.3% employee + 0.5% employer = 0.8% combined, etc.). These contributions are separate from federal income tax and would not be affected by this proposal. But the political and economic interactions between the proposed tax architecture and the platform's pillar funding mechanisms haven't been fully analyzed. Coherent implementation would require ensuring all the funding mechanisms operate as a coordinated whole rather than as competing demands on worker income.

This is a proposal, not a recommendation

This document analyzes whether the original proposal could work, identifies modifications that would make a version of it work, and presents the case honestly. The author does not necessarily recommend that this proposal be incorporated into the platform's tax architecture. The platform's existing approach to taxation — modest progressive surcharges combined with pillar-specific contributions — may be preferable for reasons this document hasn't fully analyzed. The proposal is offered as a substantive option for consideration, with the trade-offs articulated, rather than as the right answer.

Even with these limitations, the analysis establishes that connecting wage floors to tax liability is more workable than first assumptions might suggest, and that the political dynamics it creates are genuinely powerful. The proposal deserves serious consideration even if specific parameters require refinement.

Disemployment Sensitivity Analysis

This section provides the quantitative disemployment sensitivity analysis that Open Issues Registry RESEARCH-3 specifically asked for. The platform's Manifesto and concept-analysis documents have characterized wage-floor disemployment effects as 'minimal' qualitatively. RESEARCH-3 noted that minimum-wage research literature produces a range of empirical labor demand elasticities (typically -0.1 to -0.3 for low-wage labor) and that running the platform's wage-floor architecture against this range would produce a quantitative range estimate. This section presents that analysis. The analysis is straightforward arithmetic; what required pause was the platform's willingness to engage with worst-case quantitative outcomes rather than rest on qualitative claims of minimal effect.

Methodology

Approximately 20.5 million American workers earn below their occupation's 25th-percentile wage floor as defined by the wage floor Empirical Analysis. The aggregate wage gap across these workers (the amount their hourly wages would need to rise to reach the floor, summed across all affected workers) is approximately 12 percent of their current aggregate hourly earnings, weighted by the depth of below-floor positioning. Standard labor demand elasticity is the percentage change in employment divided by the percentage change in wages. At elasticity ε, a 12 percent wage increase implies a 12 × |ε| percent employment decrease across the affected population. The implied job loss range across affected workers, at three reasonable elasticity values, is presented below. (Source baseline: see Sources_And_Derivation_Convention.docx.)

Sensitivity Range Across Standard Elasticities

At elasticity -0.1 (the lower end of standard low-wage labor demand elasticities, suggesting minimal employment response): the implied employment effect is a 1.2 percent reduction across the 20.5 million affected workers, or approximately 246,000 jobs at risk. This is the platform's most optimistic plausible outcome and is consistent with the Manifesto's qualitative characterization. (Source baseline: see Sources_And_Derivation_Convention.docx.)

At elasticity -0.2 (the middle of the standard range, suggesting moderate employment response): the implied employment effect is a 2.4 percent reduction, or approximately 492,000 jobs at risk. This is still 'minimal' as a percentage of the US workforce of approximately 163 million workers (about 0.3 percent), but is half a million people in absolute terms. The Manifesto's qualitative characterization is defensible at this elasticity but understates the absolute magnitude. (Source baseline: see Sources_And_Derivation_Convention.docx.)

At elasticity -0.3 (the upper end of standard low-wage labor demand elasticities, suggesting more substantial employment response): the implied employment effect is a 3.6 percent reduction, or approximately 738,000 jobs at risk. At this elasticity, the platform's claim of 'minimal' disemployment becomes harder to defend. Three-quarters of a million workers losing jobs as a direct consequence of platform deployment is not 'minimal' from the perspective of those workers and their communities. The Refundable Bridge Credit absorbs much of the household-income impact, but the Refundable Bridge Credit cannot restore the worker's employment, occupational identity, and labor market participation.

Honest Implications

The honest range is approximately 0.25 to 0.75 million jobs at risk from wage floor implementation. The platform's qualitative claim of 'minimal' is supportable at the lower end of this range and increasingly difficult to defend at the upper end. The platform should preserve the qualitative claim for the lower-elasticity scenarios (which much of the recent minimum-wage research literature supports as more empirically realistic) but acknowledge the upper-elasticity scenarios as a substantive risk.

Three mitigating factors apply to all elasticity scenarios: (1) the wage floor is occupation-specific rather than uniform, which avoids the worst dislocations of dollar-denominated minimum wages; (2) the Refundable Bridge Credit absorbs household-income shocks for workers displaced during the transition; (3) phased implementation over multiple years allows employer adjustment without sudden labor demand shocks. These factors do not eliminate disemployment risk but reduce its severity relative to a same-magnitude minimum-wage increase.

RESEARCH-3 is now mitigated. The quantitative sensitivity analysis is incorporated into the platform's analytical framing. Remaining work for RESEARCH-3 lies in calibrating which elasticity scenario is most empirically realistic for the platform's specific wage-floor structure, which requires labor economics expertise. The platform's claim should be updated from 'minimal' (qualitative) to 'on the order of 0.25 to 0.75 million jobs at risk depending on labor demand elasticity' (quantitative).

International Comparison: Peer-Nation Wage-Floor Approaches

This section addresses a peer-nation-comparison-missing finding from the v3.1.0 policy-professional persona simulation. The platform's wage-floor architecture has been presented as a design choice without explicit positioning within the international comparative landscape. A policy professional evaluating the platform would want to know how its choices map onto known international approaches and what evidence informs the divergences. This section provides that comparison for three peer nations whose wage-floor policies are well-studied: the United Kingdom, Australia, and Germany.

United Kingdom: National Living Wage

The UK National Living Wage is set by the UK Low Pay Commission, which publishes annual recommendations to government based on evidence from labor-market data, employer surveys, and economic modeling. The Commission targets a wage floor at two-thirds of median hourly earnings, with phase-in mechanisms when target shifts would create unusually large adjustments. The platform's wage-floor architecture differs from the UK approach in two ways: (1) the platform sets occupation-specific wage floors at the BLS twenty-fifth percentile by occupation rather than a single national floor at a percentage of median earnings; (2) the platform's wage floor functions as a tax-exemption parameter rather than a binding minimum wage. The policy intents are different: the UK approach addresses pay floors directly; the platform's approach uses wage floors as a structural feature of tax architecture that exempts low-wage income from federal income tax.

Australia: Fair Work Commission

The Australian Fair Work Commission sets occupation-specific minimum wages (called modern awards) covering most Australian workers, plus a national minimum wage as a floor for workers not covered by modern awards. The Commission considers labor-market evidence, social-policy considerations, and industry-specific factors in setting modern award rates. The platform's wage-floor architecture is closer to the Australian approach than to the UK approach in that both use occupation-specific wage parameters. The differences are: (1) Australian modern awards are binding minimum wages; the platform's wage floors are tax-exemption parameters; (2) Australian modern awards include comprehensive labor-condition specifications (hours, leave, allowances) beyond just wage rates; the platform's wage floors are wage parameters only. The architectural similarity is the recognition that occupations have different equilibrium wage levels and that a single national floor may be too blunt an instrument.

Germany: Mindestlohn

Germany introduced a national statutory minimum wage (Mindestlohn) in 2015, set by the Mindestlohnkommission (a tripartite body of employer, employee, and academic representatives) and adjusted biennially. Germany's wage-floor architecture differs from the platform's in that Germany maintains both the national minimum wage AND industry-specific collective-bargaining wage floors set through Tarifvertraege (collective agreements). The platform's approach has no direct analogue to the collective-bargaining layer: federal wage floors set by occupation are decided through the BLS percentile mechanism rather than through industry-level negotiation. A policy professional evaluating the platform might ask whether the platform's wage-floor architecture forecloses or accommodates collective-bargaining mechanisms; the platform's position is accommodating: BLS percentile-based wage floors set the federal-tax-exemption parameter, but industries and states remain free to set higher minimum wages or negotiate higher floors through collective bargaining.

What the comparison reveals

The international comparison reveals that the platform's wage-floor architecture is structurally novel in using wage floors as tax-exemption parameters rather than as binding minimum wages. None of the three peer nations uses wage floors this way. The architectural intent is documented in the Wage Floor Concept Analysis: the platform's wage-floor approach is one component of a broader redesign of federal income tax to exempt structurally low-wage occupations from federal income tax burden, which is conceptually different from setting the legally-binding wage minimum. A policy professional reading this comparison would understand the platform is not proposing to replace minimum-wage law with the wage-floor parameter; it is proposing a tax-architecture innovation that uses the wage-floor concept structurally. The minimum-wage law (whether federal, state, or sectoral) remains separately operative.

Closing

This document was produced because a citizen asked whether wage floors could be connected to tax liability in a way that would encourage adoption of the wage floor and provide direct benefit to all workers. The answer turns out to be more nuanced than either yes or no.

The simplest version of the proposal cannot work — it produces revenue collapse that the federal government cannot survive. But the underlying intuition points at something real: the current tax system fails to align worker interests with adequate wage floors, and connecting the two would produce political dynamics that current architecture lacks. A modified version that uses the wage floor as a phased-out personal exemption, combined with high-earner surcharges and supplementary revenue from corporate, capital gains, and estate tax reform, captures most of the original proposal's benefits while substantially preserving fiscal viability — though a $380 billion annual gap remains and would need to be addressed in any actual implementation.

The proposal also illustrates a broader pattern that has emerged across the platform's development. Citizens engaging with the platform consistently surface dimensions the original analytical work didn't anticipate. Identity theft reduction, retroactive debt retirement, cognitive bandwidth restoration, information transparency — each of these emerged from citizen observation rather than from the platform's original design. The wage-floor-as-tax-liability proposal continues this pattern. It is the fifth instance of citizen engagement producing substantive additions to the platform's architecture.

Whether this specific proposal should be incorporated into the platform's tax architecture is a question that requires further analysis and political judgment. What the proposal definitely accomplishes is demonstrating that the platform's architectural choices have implications beyond what was originally articulated. The wage floor is not just a wage policy mechanism. It is potentially the basis for a tax architecture that aligns worker interests, simplifies decision-making, and produces political coalitions for adequate compensation that current tax policy does not produce.

Citizens reading this document who find the proposal compelling are invited to refine it, extend it, or propose alternatives. Citizens who find it unconvincing are invited to engage with the platform's existing tax architecture as articulated in the manifesto and other documents. Either path is welcome. The proposal exists as an option for consideration, with honest acknowledgment of its strengths and limitations, rather than as a settled answer.

“The simplest version of this proposal cannot fund the federal government. The intuition behind it is real and powerful. The work of finding a version that preserves the political value while solving the fiscal problem is the work this document has tried to do. The result is offered for consideration rather than as a final answer.”

Jason Robertson

Ohio, May 4, 2026