Appendix E
Pro Forma Fiscal Projections (Year 1)
Purpose:
To demonstrate the mathematical solvency of the proposed tax structure against the core constitutional obligations of the Federal Government. The following projections use Fiscal Year 2025 baseline economic data, adjusted for the structural reforms mandated by this Declaration.
I. Revenue Projections (The Means)
Assumptions: Based on estimated FY2025 Total Personal Income ($25.0T), and Corporate Profits ($3.4T).
| Source | Rate | Tax Base | Projected Revenue |
|---|---|---|---|
| Uniform Income Tax (Net Federal Share) | 7% | $25.0 Trillion | $1.75 Trillion |
| Uniform VAT (Zero-Rated Essentials) | 15% | $15.6 Trillion | $2.34 Trillion |
| Corporate Profit Tax | 25% | $3.4 Trillion | $0.85 Trillion |
| TOTAL FEDERAL REVENUE | $4.94 Trillion |
Note: The 5% "Retirement Share" of the Income Tax is excluded from Federal Revenue as it is diverted directly to private accounts.
II. Expenditure Projections (The Obligations)
Assumptions: Immediate termination of non-constitutional agencies (Education, Housing, Energy, etc.); full honor of Legacy Entitlements; maintenance of Defense and Interest obligations.
| Category | Description | Projected Cost |
|---|---|---|
| Social Security (Legacy) | Mandatory payments to current/near retirees | $1.50 Trillion |
| Medicare (Legacy) | Coverage for existing beneficiary cohorts | $1.00 Trillion |
| Net Interest on Debt | Service on existing ~$38T Debt | $1.20 Trillion |
| National Defense | Western Hemisphere & Strategic Deterrence | $0.90 Trillion |
| Veterans Affairs | Medical and compensation obligations | $0.35 Trillion |
| Core Constitutional Functions | Courts, DOJ, State Dept, Treasury, Borders | $0.10 Trillion |
| TOTAL FEDERAL SPENDING | $5.05 Trillion |
Note on Defense & Veterans: The allocation represents a strategic retrenchment. Savings derived from closing overseas bases and ending foreign aid are reinvested into homeland defense and the unconditional fulfillment of obligations to those who have borne the battle. We do not fund foreign empires; we fund our own defenders.
III. The Solvency Gap & The Land Bridge
Year 1 Deficit: ~$110 Billion (approx. 2% of budget).
While the structural reforms balance 98% of the budget in Year 1, the accumulated interest burden ($1.2T) creates a nominal deficit. This gap is closed not by borrowing, but by the Asset Liquidation Mandate (Section I.4).
The Land-for-Debt Mechanism:
- Asset Sale: Mandated divestment of 50% of federal surface lands (approx. 320 million acres).
- Revenue Target: Conservative estimates (grazing, mineral, and timber land) project multi-trillion dollar liquidity events over the transition decade.
- Impact on Future Budgets: Proceeds from land sales are applied strictly to debt principal. For every $1 Trillion of debt retired, the government’s annual interest payment drops by approximately $40 Billion (assuming a 4% blended rate).
- Result: This mechanism permanently lowers the cost of government, converting the Year 1 deficit into a structural surplus by Year 2.
IV. Year 2 Trajectory (The Surplus)
By Year 2, the combination of asset liquidation and natural economic growth pushes the system into surplus.
- Debt Reduction Impact: Sale of initial land tranches reduces Interest Expense by ~$80 Billion.
- Growth Impact: 2% conservative growth raises Revenue base to ~$5.03 Trillion.
- Result: The budget moves from a $110B deficit to a structural surplus.
Conclusion:
The system is mathematically solvent. By liquidating unused assets to retire expensive debt, the government bridges the transition gap without crushing taxation or inflationary money printing**.** The divestment of federal assets pushes the budget into Primary Surplus by Year 2, allowing for the rapid amortization of the remaining national debt.