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Diversity and taxation

Intuition requires diversity. Evolution has made us extremely diverse, but the winner take all culture of the West makes it increasingly difficult to tap into the creativity inherent in human diversity. We have to reverse this. Perhaps the single most important thing that could be done would be a asset tax. It should be a progressive tax with a very large deductible (in the millions of dollars). It could replace the corporate income tax, capital gains tax and taxes on dividends. The deductible for individuals should be set high enough so a family can become financially independent, with enough wealth to meet expenses for an indefinite future with reasonable assumptions about market appreciation and cost of living.

For Corporations the deductible should be large enough to encourage the formation of new companies. At the high end the rate should discourage megacorporations and huge mergers. The deductible limits and rate brackets should grow with inflation and also with per capita income, but at a lower rate than growth of that income. The idea is from the founding fathers of the U. S. We want to encourage people to obtain economic freedom and discourage excessive concentrations of power.

Such a tax would be more just than almost all existing taxes. Much of the federal government exists to protect wealth and thus it is only fair that wealth be taxed to pay for that protection. When one has accumulated more wealth than one will need in a lifetime than wealth becomes a tool for doing good by wise investing. It is socially valuable for those that are most efficient at such investing to accumulate wealth most rapidly and those that are not good at this to loose the wealth they cannot make productive. This is best accomplished by taxing wealth itself and not the income obtained from wealth.

When corporations become too powerful they are able to leverage their power in ways that give them an unfair advantage over smaller competitors. The antitrust laws have a limited ability to prevent this. Because of this phenomena very large corporations impose a bigness tax on all of us by limiting the ability of competitors to develop innovative and cost effective alternatives. An outrageous example of this is the ``Microsoft tax'' on desk top operating system and office productivity tools. A bigness tax on corporations will cause corporations to voluntarily limit their size through spinoffs. It will recapture some of the excess profits of excessively large and powerful corporations that refuse to break up into smaller independent entities.


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Next: A Global Organism Up: What will be Previous: Terrorism   Contents


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