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Focus on Revenues — Drive Sustainable Economic Growth + Change Tax Policies Focus on Revenues Invest in Technology / Infrastructure / Education Increase / Improve Employment Improve Competitiveness Review Tax Rates Reduce Subsidies / Tax Expenditures*/ Broaden Tax Base Drive Sustainable Economic Growth Consider Changing Tax Policies Note: *Tax subsidies / expenditures are losses to the U.S. Treasury from granting certain deductions, exemptions, or credits (such as those on mortgage interest payments and employer-sponsored health insurance payments) to specific categories of taxpayers. USA Inc. | What Might a Turnaround Expert Consider? 355 (@ 4 www.kpcb.com GDP Growth = Biggest Driver of Federal Revenue Growth...& 85% Correlation 1940 — 2009 Historical Correlation Between USA Real GDP Y/Y 2010E — 2019E : P= fi) & Real Federal Receipts Y/Y = 85% If Real Real Federal 60% | © Real GDP Y/Y vs. Real Federal Receipts Y/Y 7 ie C oe is ou row... — -Linear Trendline (y=2.77x-0.0438, R42=0.73) 4 _ ee Y al 5% 7% xe o 7 4 5 = 40% Prod > 3 2 a - 7 m 2 0 wa 3 r) Pa . 1 -2 < a 0 4 S 20% - 7 1 7 ng a +, 7 -2 -9 8 eo’ . 3 11 weg Fac 4 13 e 5% .° ee oy ee 5% 10% 15% 20% 25% - € Current Consensus a 7 GDP Forecasts 7 © Real GDP Y/Y (%) 7 ® -20% — Data source: White House Office of Management & Budget (1940 — 2009). (@ EB) www.kpcb.com USA Inc. | What Might a Turnaround Expert Consider? 356 HOUSE_OVERSIGHT_021019