We Asked ChatGPT To Design a Tax System for Every Income Bracket
Written by
Nicholas Morine
Edited by
Cory Dudak
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The iterative growth of one world’s most popular AI models, ChatGPT, has offered it the ability to conduct extensive research, producing reports on everything from finance to scientific advances.
On the former subject, we consulted ChatGPT 5, challenging it with the task of designing a U.S. tax system with consideration of every income bracket in place. Here’s what the LLM had to say.
ChatGPT Prefers Using Poverty Guidelines, Tax-Free Living Allowance Standards to Inform Tax System
ChatGPT gestured toward the U.S. Department of Health and Human Services (HHS) 2025 poverty guidelines as a baseline for its ideal tax system, suggesting a Tax-Free Living Allowance (TFLA) of $15,650 for single filers or $21,310 for those married, filing jointly (with no children).
However, for each additional household member, the TFLA increases. So, for a married couple with two children, that TFLA is set at $32,150. It should also be noted that Alaska and Hawaii would be afforded even greater TFLA limits, as the HHS uses separate tables for these states.
US Tax Brackets Reimagined by ChatGPT
With everything being pegged to the TFLA amount, individual taxpayers would see the following tax brackets enacted for tax year 2025.
- 0% tax on income up to the TFLA amount.
- 10% tax on income falling between the TFLA amount and twice that amount ($15,650 to $31,300 for individual taxpayers).
- 15% tax on income earned which falls between 2x and 3x the TFLA standard ($31,300 to $46,950).
- 20% tax on income between 3x and 5x the TFLA ($46,950 to $78,250)
- 28% tax on income between 5x and 8x the TFLA ($78,250 to $125,200)
- 33% tax on income between 8x and 15x the TFLA ($125,200 to $234,750)
- 37% tax on income between 15x and 50x the TFLA ($234,750 to $782,500)
- 45% tax on income exceeding 50x the TFLA ($782,500+)
“The 8-bracket system starts by taxing nothing up to the poverty-line allowance (so essentials are always covered), then applies a low 10% rate just above that to reward work and protect entry-level earners. A modest 15% step follows, easing progressivity without hurting middle earners, before moving to 20% on solidly middle-class incomes to balance fairness and revenue. Upper-middle incomes face 28%, reflecting higher capacity to pay, while high earners step into 33% to ensure stronger contributions,” ChatGPT began, explaining its rationale.
“Very high earners reach 37%, capturing more revenue without pushing avoidance too hard, and finally, ultra-high incomes above 50 times the poverty line face 45%, so the wealthiest contribute the most. In short, the structure protects basics, supports work, gradually scales with income, and places the heaviest responsibility on those most able to pay,” it added.
Also of note, ChatGPT suggested taxing dividends, interest and gains from investment at normal rates, but with one caveat: excluding the first $5,000 of realized gains to reduce the lock-in effect, a “known efficiency cost of capital-gains realization.”
The model also suggested pairing the individual schedule with a 25% corporate tax, noting that the bulk of the tax burden rests upon capital owners in standard distributional models — citing CBO data — and to adopt the OECD Pillar Two call to institute a minimum 15% effective tax rate on large multinationals operating stateside.
For its part, the Trump administration has firmly stood against application of the Pillar Two principles, as Mondaq outlined.
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