Taxation Summary Table

The below table gives a brief summary of the type of taxation and how they vary with pre-tax returns and investment time horizon.

Tax Type	Formula	As n increases, tax drag:	As r increases, tax drag:
Accrual taxes	FVIF = (1+r(1-t))^N	% increases and amount increases	% increases and amount increases
Deferred capital gains tax	FVIF =(1-tcg)x(1+r)^N + tcg x B	Amount increases and % increase If B<1 then % > t If B = 1 then % = t If B>1 then % < t	Amount increases and % increase If B<1 then % > t If B = 1 then % = t If B>1 then % < t
Annual wealth tax	[(1+r)*(1-tw)]^N	Amount increases and % increases	Amount increases but % decreases
Blended taxation	wattr = pd x td + pi x ti + pcg x tcg R = r *(1-wattr) T = tcg x (1-pi-pd-pcg) / (1-wattr) FVIF = (1-T) *(1+R)^N + T – (1-B) x tcg

Accrual Equivalent After Tax Return = (EOP Value/BOP Value)^(1/N)-1