Establishing a “tax-free state” Through Six Elements
— A National Financial System Integrating Government Bonds, Stocks, and Crypto Assets —
Sovereign Stock Concept
Version 1.0
⸻
Summary
A summary
This paper examines the possibility of redesigning the national financing and monetary system, and ultimately establishing a “tax-free state” that does not require dependence on tax revenue from six financial factors.
The core of this plan is the Sovereign Stock.
National stocks are conceived as new national capital securities that do not belong to existing financial products that combine the three elements of government bonds, stocks, and crypto assets.
In this paper, the national financial system consists of the following six elements.
Government bank
Central bank bonds
Central Bank Bank Ticket
The funds
Government coins
National stock
By dividing the roles of these six, the country’s “currency”, “credit”, “debt” and “capital” are designed separately.
The current national finances are mainly supported by tax revenue and government spending by government bonds.
On the other hand, in this plan, capital raising by national shares is incorporated into national finances, and the state itself forms capital, and the capital and economic value generated from it are used as a financial foundation.
As a final consequence, we will examine the possibility of establishing a state that does not use tax revenue as the main financial source, that is, a “tax-free state”.
⸻
- Redesign the state’s money
If we simplify the current national finances,
Tax revenue + government bonds → government expenditure
It is a structure called.
Taxes are transferred from citizens and companies to the government.
Government bonds are a mechanism in which the government spends by borrowing funds.
In other words, national financing is basically
Collect or borrow
It depends on two methods.
This concept adds a third method to this.
That is,
Raise capital
It is a method.
That is,
Tax revenue + government bonds + government stocks
Build a national finance called.
⸻
- The idea of national stocks
Sovereign Stock is a new capital security issued by the state.
There are three ideological sources.
The funds
From government bonds,
National credit
Issued by the state
Huge amount of fundraising
Circulation in the financial market
Incorporate the characteristics of.
Stock
From stocks,
Capitality
Market price
Nature as an investment object
A system that does not presuppose a principal guarantee
Incorporate.
Crypto assets
From crypto assets,
Digitality
Marketability
Small mouth
New financing market
Incorporate the characteristics of.
Therefore, national stocks are
It is not a government bond, nor a regular stock, nor a cryptocurrency.
It is a national capital securities that combines the characteristics of the three financial systems.
⸻
- The difference between government bonds and government stocks
Both government bonds and national stocks are government financing methods, but the basic nature is different.
The important point of national stocks is
It is not to change the name of government bonds to stocks.
It is to establish new securities with a different legal and accounting nature from government bonds.
⸻
- Six elements
In this concept, the national financial system is composed of six elements.
1 Government bank
It is an institution responsible for government financial affairs.
It is assumed that it will be responsible for the management of government funds, the issuance and management of national stocks, and financial transactions with the central bank.
⸻
2 Central bank bonds
It is a financial security issued by the central bank.
Positioned as a means of adjusting the balance sheet of the central bank.
However, the mere issuance of central bank bonds does not increase the net assets of the entire country.
⸻
3 Central bank notes
It is a currency issued by the central bank.
It functions as a means of payment in the national economy.
Unlike national stocks, national stocks are not the currency itself.
⸻
4 Government bonds
It is a traditional government debt.
There is no need to abolish it immediately after the introduction of national stocks.
Government bonds will survive as a means of raising funds that are different from national stocks.
⸻
5 government coins
It is a currency issued by the government.
Central bank notes are divided into issue entities.
Position it as an element to clarify the role of the government and the central bank.
⸻
6 national stocks
It is a capital security issued by the state.
It will be the center of this concept.
Through state stocks, the state raises funds from the capital market and uses the capital to form national assets and economic activities.
⸻
- The national financial system with six elements
If you organize the six elements, it will be as follows.
The important point of this structure is
Do not treat currency, liabilities, and capital as the same thing
It is.
⸻
- Think of the country as a “company”
Think about replacing national finances with companies.
The corporation is
Borrowed money
I’m not just running a company.
Issue shares,
Capital
Procure.
Then, use that capital to conduct a business and form assets and profits.
The same idea is applied to the country.
If we simplify the current national finances,
Tax revenue + Borrowing ↓ Government spending
It is.
When national stocks are introduced,
Tax revenue + Government bonds + National stock ↓ Government spending and national investment ↓ National assets and economic value
It becomes a structure called.
In other words,
Change the state from a “debt-makers” to a “capital-procurer”
It is an idea.
⸻
- National balance sheet
Consider this idea in the balance sheet (BS).
The basic accounting relationship is
Assets = liabilities + net assets
It is.
For example, if
National assets: 500 trillion yen
Liabilities such as government bonds: 1,500 trillion yen
If so,
Net assets = ▲1,000 trillion yen
It will be.
Introduce national stocks here.
However, the important thing is,
Issuing national shares alone does not automatically increase the net assets of the entire country.
That is.
It is necessary to use the funds obtained from the issuance of national shares to form assets and revenue bases that actually have economic value.
Therefore,
National stock issuance → Capital procurement → National investment and asset formation → Revenue and economic value
It is important to create a cycle.
⸻
- Central bank bonds and government coins
In this plan, we will also consider a financial structure that combines central bank bonds and government coins.
For example, as a thought experiment,
Central bank bonds: 1,000 trillion yen
Issue,
Government coins: 1,000 trillion yen
Issue.
However, if the government and the central bank are considered as one public department, debts and debts incurred internally may be offset.
Therefore,
If the central bank issues 1,000 trillion yen of corporate bonds, the country’s deficit of 1,000 trillion yen will disappear as it is
That’s not the case.
From this point of view,
Financial adjustment
A set
National capital formation
It is necessary to distinguish.
And national stocks are responsible for the latter.
⸻
- Capital raising by national stocks
When a joint stock company issues shares,
Investor → Fund → Company
The flow is born.
Similarly, in domestic stocks,
Investors → Funds → Government
Raise funds to raise funds.
The capital raised by the government,
National investment
A public service
Economic foundation
Productivity improvement
New business
Other national investments
It is used for etc.
If economic value is formed as a result, national stocks are not just financing,
Financial markets for the formation of state capital
It will be.
⸻
- There is no need to change existing government bonds into national stocks
In this plan, there is no need to forcibly convert existing government bonds into national stocks.
Existing government bonds are managed by the existing system.
On the other hand, regarding the new demand for funds,
Procurement by government bonds
A set
Procurement by national stocks
Build a system that allows you to choose.
As a result, national stocks
Mechanism for canceling government bonds
Instead,
National capital raising methods that are different from government bonds
It will be established as.
⸻
- Marketability of national stocks
Domestic stocks are not fixed-priced products, but their value fluctuates depending on the market price.
Investors can acquire national shares and buy and sell them in the market.
The price is
National credit
Economic growth
Monetary policy
Financial situation
Demand for national stocks
Market liquidity
Future economic value
It changes depending on etc.
Therefore, national stocks are not fixed debts such as government bonds,
Capital securities in which the market evaluates the future value of the country
It is designed as.
⸻
- National stocks and crypto assets
The idea of crypto assets is also incorporated into national stocks.
However,
National stocks = cryptocurrency
Not.
Incorporating from crypto assets is
Digital publication
Digital holding
Market distribution
Small-set trading
New fundraising method
And so on.
It is not a prerequisite for this concept to set the support of national stocks on national assets such as land, roads, airports, and water supply itself.
National stocks are,
New capital securities established by national credit and system
Design as.
⸻
- The road to a tax-free nation
Here, let’s consider the final theme of this concept, “tax-free state”.
One of the reasons for the need for taxes is to secure the financial resources for the government to make the necessary spending.
If the country,
Revenue
Not only that,
Capital raising by national stocks
And,
National assets and economic values formed from it
If government activities can be maintained, the dependence on tax revenue can be reduced.
In addition, if a system that can obtain sufficient revenue and economic value from national capital is established,
A system that does not make taxes the main financial source of national finances
There is a possibility that it can be built.
This is a tax-free state in this concept.
⸻
- " Will a “tax-free state” be established only with national stocks?
If you issue national shares, you will not automatically become a tax-free country.
What is needed is,
National stock ↓ Capital raising ↓ Formation of national assets and economic value ↓ National revenue and fiscal foundation ↓ Reduction in dependence on tax revenue
It is a cycle.
Therefore, the conditions for the establishment of a tax-free state are not only national stocks themselves,
Establishment of the national stock market
Sufficient investment demand
Operation of national capital
Economic growth
Inflation management
Financial discipline
Stability of the financial market
Proper management of national assets
It is in the comprehensive system design, including etc.
⸻
- Perfection by six elements
The national financial system that this concept aims for is summarized as follows.
Government
↓ Government bank
↓
┌────────────────┐ │ Central Bank Bonds │ │ Central Bank Bank │ │ Government bonds │ │ Government coins │ │ National stock │ └────────────────┘
With these six elements,
Finance
Currency
Debt
Capital
Each is designed as a different function.
At the center of it is the national stock.
⸻
- The national image that the national stock aims for
In the current national finances,
Collect taxes from the people ↓ The government spends
The basic structure is.
In addition, if tax revenue alone is insufficient,
Issue government bonds ↓ Spend by debt
The mechanism is used.
In the national stock concept, a third route is added to this.
Issue national shares ↓ The state raises capital ↓ Form national assets and economic value ↓ Return the value to national finance
By establishing this cycle,
“Keep the nation with taxes”
From the previous idea that
“The state itself forms capital and maintains the state through that capital”
Aiming to change to the idea of.
⸻
- Conclusion
The “Establishment Of A Tax-Free State By 6 Elements” Is Not Just A Proposal For Tax Reform.
It is a plan to redesign the state’s money itself.
The center of it is,
Government bank
Central bank bonds
Central Bank Bank Ticket
The funds
Government coins
National stock
There are six elements of.
And national stocks are
Credit of government bonds
Capitality of stocks
Marketability and digitality of cryptographic assets
Combine.
The ultimate purpose is
Changing the state from a “system that operates by taxes and debt” to a “system that forms capital and operates by that capital”
It is.
Beyond that,
National finances that do not require tax revenue
That is,
Tax-free country
Envision the form of a new state.
National stocks are the core financial instrument for forming a national capital market for that purpose.
Convert government bonds into state capital. Capital to financial resources. Financial resources to the people.
This is the basic idea of the new national financial system based on six elements.