The Tax-Free Government concept
Summary
- A summary
This white paper proposes a transition from the current national finances, in which taxes collected by the government from the people are the main financial resources, to the state itself forms capital, generates profits from that capital, and uses the profits as government finances.
As a core system, the government establishes a state-owned Sovereire Wealth Fund Co., Ltd.
The corporation forms and manages state capital, issues sovereign shares for capital formation, and issues sovereign crypto assets as a means of connecting the national financial system and the digital asset market.
The ultimate goal of this plan is to free national finances from dependence on tax revenue and to establish a tax-free state aiming for a tax rate of 0% by securing government financial resources through profits arising from national capital.
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- Current national finances
The current national finances secure the government’s financial resources mainly through tax revenues and government bonds.
Since taxes are collected from the people and companies, there is a direct relationship between securing government financial resources and people’s property.
In addition, if tax increases are made in the midst of a deflationary recession or income stagnation, it may reduce the actual disposable income and put pressure on people’s lives.
In particular, if only the tax burden increases in a situation where income is not sufficiently increased, it may affect food, housing, medical expenses, utility and other living expenses.
Therefore, there is a limit to the way to solve the government’s lack of financial resources, relying solely on the increase in the national burden.
The problem with this plan is not simply that “taxes are high”.
It is necessary to change the structure of national finance itself, which depends on collecting government financial resources from the people.
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- The basic principle of a tax-free state
A tax-free state in this plan is not simply a policy of 0% tax rate.
It means changing the fiscal revenue structure itself so that the government can maintain public services and other government activities without the need for taxes.
Currently,
Citizens and companies → Taxes → Government
The main focus is on the formation of financial resources.
On the other hand, in this concept,
National capital → Management → Profit → Government financial resources → Tax reduction
Form a cycle called.
In addition, by continuously expanding national capital,
National capital → Profits → Government resources → Tax cuts → Reduction in tax dependence → Tax-free countries
Aiming for a long-term transition.
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- State-owned Sovereed Wealth Fund Co., Ltd.
As a core institution to achieve a tax-free state, the government will establish a state-owned Sovere Wealth Fund Co., Ltd.
Unlike general private companies, the main purpose of this corporation is to form and manage national capital.
The main functions are as follows.
Formation of national capital
Issuance of sovereign shares
Issuance of sovereign crypto assets
Management of raised capital
Accumulation of operating profit
Transfer of profits to government financial resources
Long-term expansion of national capital
Decrease in tax dependence of national finance
The important thing is not that the government obtains funds by collecting taxes from the people, but that the state itself forms capital and uses that capital to generate financial resources.
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- Sovereign stock
Sovereign shares are conceived as a new national financial product that is different from ordinary joint stock company shares and government bonds.
Government bonds are basically,
Fundraising by debt
It is.
On the other hand, sovereign shares are
Fundraising by capital
Position it as.
Therefore, in this plan, instead of relying solely on government bonds as a means of financing for the government, we will build a new financial means to form national capital.
Sovereign shares are not collateral for state land, roads, airports, water supply, or other individual state-owned assets.
The basis of credit and value formation is the capital formed by the state itself and the economic value created from that capital.
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- Sovereign crypto assets
Sovereigner crypto assets are conceived as new digital assets issued by State-owned Sovereign Wealth Fund Co., Ltd.
While sovereign shares are responsible for the formation of national capital, sovereign crypto assets have a role in connecting the national financial system and the digital asset market.
This will examine the possibility of incorporating not only the traditional government bond market and the stock market, but also the digital asset market into the area of national capital formation.
However, sovereign crypto assets are not just for the purpose of issuing crypto assets.
It is positioned as a component of the national financial system to form state capital and generate public financial resources from that capital.
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- Property rights and public welfare
Property rights guarantee property.
In general institutional design, there is a coordination relationship between property rights and public welfare.
However, in this concept, I don’t think it’s necessary to see the two as necessarily a conflict of interest.
A tax-free state is conceived from the idea that it is possible to build a more abstract national financial system that realizes both property rights and public welfare at the same time.
Under the current system, in order to secure the financial resources necessary for public welfare, people’s income and consumption are taxed.
On the other hand, in this concept,
Instead of realizing public welfare by collecting people’s property, the state itself forms capital and generates profits from that capital and makes it a public financial resource.
From this idea, the concept of using profits arising from sovereign shares and sovereign crypto assets of State-owned Sovereign Wealth Fund Co., Ltd. is derived from government financial resources.
That is,
Instead of conflicting property rights and public welfare, a new financial structure is formed from the higher concept of state capital that includes both.
This is the basic theory of a tax-free state in this concept.
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- Tax abolition and democracy
For tax-free countries,
“If taxes go away, politicians won’t listen to the people.”
There is a concern that.
However, political rights in democracy are not determined by the amount of tax paid.
Therefore,
It is not that the political value is high because it is a high taxpayer, and it is not that the political value is low because it is a tax-exempt person.
High-value taxpayers and tax-exempt people are politically equal as sovereigns.
In tax-free countries, this relationship becomes clearer.
In today’s society, the economic burden of “paying taxes” and participation in politics may be connected in consciousness.
For example,
I’m fulfilling my political duties because I’m paying taxes
I don’t have time to go to the election because I have to work and pay taxes
Even if you are interested in politics, nothing will change
You can leave politics to politicians
There is a possibility that such awareness will arise.
In tax-free countries, at least the economic burden of “tax payment” and political participation are no longer linked.
As a result,
Change from the consciousness of “supporting the country as a taxpayer” to the consciousness of “choosing the state as a sovereign”
There is a possibility that.
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- The democratic significance of 1 vote
Even in tax-free countries, the electoral system is maintained.
High-income taxpayers, low-income earners, and tax-exempt people have one vote as one sovereign.
Therefore, a tax-free state can be seen not as a system that weakens democracy, but as a system that clearly separates the amount of tax payment and political value.
Rather,
It is not “how much tax I have paid” but “how do I choose the direction of the country as a sovereign”
There is a possibility of strengthening the idea of political participation.
In this sense, a tax-free state is not just a tax reform.
That is,
From “taxpayer” to “sovereign”
It is also a change in the relationship between the people and the state.
The principle of democracy, one person, one vote, does not change depending on the size of income and property.
Therefore, in a tax-free country, there is no need to link the difference in economic burden to the difference in political value, and this concept believes that the democratic significance of one vote, which all sovereigns have equally, will be clearer.
However, tax-free does not necessarily increase actual voter turnout and political participation. This needs to be verified as a possibility of system changes.
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- Political control in a tax-free country
In tax-free countries, the need for the government to collect taxes from the people decreases.
Therefore,
“If the government’s financial resources no longer depend on the people’s tax payment, there is a possibility that the government will ignore the people’s will.”
It is necessary to consider the institutional problems.
In this plan, the basis of democracy is based on “sovereignty” rather than “tax payment”.
Politicians are not elected by the amount of tax paid, but by election by the people.
Therefore, even in a tax-free country,
Election
Congress
Political surveillance by the people
Information disclosure
Financial transparency
Accountability to the government
It is necessary to maintain.
A tax-free state is not a system that separates politicians from the people.
Even after eliminating the means of raising financial resources such as taxes, it is necessary to maintain a system that allows sovereign citizens to control politics.
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- Conversion from government bonds to state capital
The current government raises financial resources that are insufficient for tax revenue alone through government bonds.
Government bonds are government debts and play an important role as a method of raising funds.
However, in this plan, from the structure that relies only on government bonds for national finances,
Debt formation by government bonds
A set
Formation of national capital by sovereign shares
Convert to a structure that coexists.
On top of that, in the long run, profits generated from state capital will secure government financial resources and reduce dependence on taxes.
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- Tax reduction funds from state capital
It manages the state capital formed by the State-owned Soveree Wealth Fund Co., Ltd., and if profits occur from it, part of the profits are used as government financial resources.
The basic structure is
Form national capital
↓
Manage national capital
↓
Generate profit
↓
Make profits a government financial resource
↓
Lower the tax rate
↓
Reduce tax dependence
↓
Further form national capital
It is a cycle.
The important thing is not to issue new government bonds for tax reduction, but to use the profits created by the state itself as a source of tax reduction.
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- Operation of national capital
State capital is not consumed only for short-term government spending, but is managed as capital that generates long-term revenue.
To do that,
Diversified investment
Risk management
Long-term management
Reinvestment of profits
Information disclosure
Independent audit
Prevention of conflicts of interest
Such a system is necessary.
The profits of state capital cannot be equated with constant tax revenue because losses may occur due to the operation of state capital.
Therefore, in order to achieve a tax-free state, it is necessary to specifically examine the necessary government expenditure, the size of national capital, expected returns, risks, and the fluctuation range of profits.
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- Governance
State-owned Sovereired Wealth Fund Co., Ltd. has the potential to manage a huge amount of state capital, so its governance is extremely important.
What is especially necessary is,
Prevention of arbitrary capital diversion from the government
Disclosure of operational information
Independent audit
Conflict of interest management
Clarification of management responsibilities
Surveillance by the Diet
Accountability to the public
It is.
The larger the state capital, the more important democratic control over its managers.
Therefore, in this concept, the basic principle of institutional design is to realize the expansion of national capital and democratic control at the same time.
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- Transition to a tax-free country
Tax-free countries do not create a tax rate by suddenly 0%, but reduce dependence on taxes while gradually forming national capital.
The basic transition process is as follows.
Establish a State-owned Sovered Wealth Fund Co., Ltd.
Develop a system for national capital formation
Issue sovereign shares
Issue sovereign crypto assets
Manage national capital
Accumulate management profits
Use profits for government financial resources
Gradually reduce the tax rate
Reduce tax dependence
Expand the formation of financial resources by state capital
Ultimately, aim for a tax rate of 0%
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- The core of this concept
The core of this plan is not to simply deny taxes.
Also, it is not a simple denial of government bonds.
The current national finances are
Collect taxes from the people
A or B
The government issues government bonds and borrows money
In response to the fact that it relies heavily on the method, it is to build a third financial resource formation method.
That is,
The state itself forms capital, generates profits from that capital, and uses the profits as public financial resources.
It is the way of thinking.
The institutional core is
State-owned Sovereed Wealth Fund Co., Ltd.
And the main financial instrument is
Sovereign shares and sovereign crypto assets
It is.
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- Conclusion
The tax-free state that this idea aims for is not simply a system that eliminates taxes.
That is,
A national financial system that aims to realize property rights and public welfare at the same time by changing the financial structure
It is.
Instead of supporting public welfare by collecting taxes from the people, the state itself forms capital, generates profits from that capital, and makes the profits a public financial resource.
To that end, a state-owned sovereign wealth fund corporation was established to form state capital through sovereign shares and sovereign crypto assets.
And instead of weakening democracy by abolishing taxes, we will separate the amount of tax paid and political value, and maintain a system in which both high-value taxpayers and tax-exempt people participate in politics as one sovereign.
A tax-free state in this concept is
Transformation from a “state supported by taxpayers” to a “state that generates financial resources through national capital and is controlled by sovereigns”
It is.
The ultimate goal is
From a country that collects financial resources from the people to a country where the country itself generates financial resources.
And,
A tax-free country that realizes public welfare while protecting property rights and allows the people to participate in politics equally by sovereignty rather than the amount of tax paid
It is to establish.