HOUSE_OVERSIGHT_021039.jpg

2

Focus on
Revenues

Drive Sustainable
Economic
Growth

Invest in Technology / Infrastructure / Education

Increase / Improve Employment

Improve Competitiveness

Consider
Changing Tax
Policies

Review Tax Rates

Reduce Subsidies / Tax Expenditures*/
Broaden Tax Base

KPCB
CB www.kpcb.com
USA Inc. | What Might a Turnaround Expert Consider? 395

Simple Tax Math* – Big Across-the-Board Tax Rate Increases Would Be
Needed to Potentially Generate Meaningful Revenue Improvements

Each one percentage point across-the-board tax rate increase would generate an
incremental $127 billion revenue for USA Inc. in F2010E¹...excluding any related
negative impact on spending / GDP growth, which is difficult to do...

Across-the-Board
Tax Rate Increase
Hypothetical Revenue Increase for
USA Inc. in F2010E ($ billions)
...Which Would Reduce
Estimated Losses in
F2010E by

1 Percentage Point
$127
8%

2 Percentage
Points (pps)
$254
16%

3 pps
$381
24%

4 pps
$508
33%

5 pps
$635
41%

10 pps
$1,270
82%

Note: *The simple tax math presented here are pure mathematical illustrations – we simply calculated how big a broad-based tax rate increase (for
individual and corporate income, as well as payroll) would have to be for USA Inc. to financial break-even. These calculations are merely mechanical
illustrations and are not meant to portray realistic solutions. 1) Incremental dollar amount calculated as 1% of projected total personal & corporate
income, which historically has been at ~87% of GDP. Source: F2010E revenue & deficit per White House OMB, GDP per CBO.

KPCB
CB www.kpcb.com
USA Inc. | What Might a Turnaround Expert Consider? 396

HOUSE_OVERSIGHT_021039