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Save the economy through government investment

Currently, the Us Federal government is in the business of taxing people. If you take a big picture approach to the value chain of the US Goverment, and try to see it as a money-maker (which is absurd, but interesting as an exercise) that is where the money comes from.

Initially, it was supposed to be in the business of levying tariffs, now its into income taxes and profit taxes. http://www.usgovernmentrevenue.com/ verifies this. Income taxes is most of it.

The breakdown of personal or business income, that is not shown there.

Some complaints about "double taxation" occur about taxes on dividends which are issued after taxes.

And the unit that all these numbers are in is a fiat currency.

Stock prices are supposed to depend on dividends, according to finance classroom theory.

When you buy equity securities, you are buying an expected future cash flow, discounted for risk, and adjusted against the current risk-free rate of return, which, ideally, is equal to the rate of inflation.

So here's the proposal: Restructure the national debt in an equity for debt swap and invest in enterprise.

Instead of taxes, government invests in properly run companies to a level where the prices are stable according to analysis by dispassionate auditors

this is a role that has been played by "institutional investors" massive bureaucracies

to be eligible for the government mutual fund buy-in, a company would have to make profits and pay dividends, lets say with a plow-back ratio of half or less, all plow-back to go into repurchase plans, and all new capital expense to come from sale of treasury stock, or an other well-defined range of clear metrics on operational success

corporate income taxes are phased out in favor of dividends

so the corporate line item going to taxes is moved to dividends

and the balloon is allowed to keep expanding.

************************************

The other idea that belongs in this essay too, or maybe a different one, is a repeat of the idea about issuing scrip that is good for paying taxes
because thats what fiat currency is
scrip that is good for paying taxes


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text orignially entered 2009-03-03 - 3:38 p.m.