- [ ] calculate business reinvestment [[fixing the national debt]] [#sonnet37](https://claude.ai/chat/07fca9a8-e627-4386-96eb-f7f7934c87a6)
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[#sonnet37](https://claude.ai/chat/686ffae9-85c7-4cc8-8f97-753664c137ae)
[#4o](https://chatgpt.com/c/67e6e69b-679c-8003-9d70-c21e270069c7)
### Cost Savings
- 600B means-testing Social Security: top 1/3 recipients paid 40–50% of 1.4T ~ 600B
- 410B cut military spending in half
- 950B socialize healthcare
- 500B Administrative overhead reduction
- 100B Pharmaceutical price negotiation
- 200B Elimination of profit-taking
- 150B Prevention and integrated care savings
- 410B reducing health care expenditures
- 100B negotiated drug prices
- 150B end of life planning: Encourage advanced care planning. reduce unnecessary interventions, aligning treatments with patient wishes
- 50B health literacy (gov Noom): individuals manage their health more effectively, better outcomes and reduced healthcare utilization
- 30B AI driven initial consultation: streamlined diagnosis and treatment processes, reducing in-person visits
- 40B telemedicine emphasis: decreased travel costs, reduced hospital admissions, and improved chronic disease management.
- 40B real-time integrated care systems: enhanced provider coordination, reduced redundant tests and procedures.
### Revenue Generation
#### Current Federal Tax Revenue 5.2T
- 2.1T federal individual income tax revenue
- 400B federal corporate tax revenue
- 1.4T Payroll taxes (FICA):
- Social Security tax: 6.2% paid by employer, 6.2% by employee. $168,600 cap
- Medicare tax: 1.45% paid by employer, 1.45%+0.9%(>$200K) by employee
- $100-110B excise taxes revenue (tobacco, alcohol, fuel, etc.)
- $80-90B customs duties (tariffs) revenue
- $80-100B Federal Reserve remittances
- $30-40B estate and gift tax revenue
- $100-120B miscellaneous fees and other receipts
- $110 Interest on federal trust funds
- $30 Fines, penalties, and forfeitures
- $20 Spectrum auctions & asset sales
- $90 Other offsetting receipts
#### Use Tax Percentages To Match Current Revenue
- 15T total personal consumption
- 2.25T = 15T x 15% federal sales tax rate
##### [[universal prebate - use tax offset system]]
![[universal prebate - use tax offset system]]
#### Business Tax
- Fairness: All businesses above a certain size contribute proportionally to their economic footprint
- Simplicity: Straightforward calculation based on already-tracked business metrics
- increase economic efficiency with higher resource utilization and ...
- Small Business Protection with first $10M being untaxed
- Minimum Corporate Contribution (MCC): 0.5% × (Total Assets + Total Annual Expenditures - $10M exemption)
- Direct Labor Expenditures Excluded
- follows productive investment philosophy
- Productive Investment: Encourages capital deployment for growth rather than financial engineering
- prevent financial engineering things like where Ford credit is more profitable than Ford automotive.
- debt Interest payments are NOT tax-deductible
##### 100% Deduction for Reinvestment With 5 Year Carryforward
| Reinvestment Type | Regulatory Difficulty | Abuse Risk | Human Flourishing Impact |
| --------------------------- | --------------------------------- | ---------- | ------------------------------- |
| Physical Equipment | Low (tangible, verifiable) | Low | Medium (productivity) |
| Employee Training | Medium (documentation challenges) | Medium | High (direct human development) |
| R&D Expenses | High (defining "research") | High | High (innovation) |
| New Hiring | Low (payroll verification) | Low | High (employment) |
| Software Development | Medium (valuation issues) | Medium | Medium (productivity) |
| Sustainability Improvements | Medium (measurement challenges) | Medium | High (environmental impact) |
##### Industry Financial Metrics, Recommended Tax Weights, and Estimated Tax Revenue
| Industry | Asset-to-Revenue Ratio | Expenditure-to-Revenue Ratio | Asset Tax Weight | Expenditure Tax Weight | Total Assets ($ Trillion) | Total Expenditures ($ Trillion) | Annual Profit ($ Billion) | Current Tax Revenue ($ Billion) | Estimated Tax Revenue ($ Billion) | |
| ----------------------- | ---------------------- | ---------------------------- | ---------------- | ---------------------- | ------------------------- | ------------------------------- | ------------------------- | ------------------------------- | --------------------------------- | --- |
| Technology | 60-70% | 50-60% | 0.1 | 2.4 | 3.8 | 2.1 | 390.2 | 42.9 | 54.2 | |
| Retail | 140-160% | 80-90% | 0.1 | 1.1 | 2.6 | 2.3 | 170.8 | 22.2 | 27.9 | |
| Financial Services | 180-200% | 60-70% | 0.2 | 0.9 | 20.5 | 1.6 | 451.3 | 58.7 | 55.4 | |
| Manufacturing | 300-400% | 75-85% | 0.2 | 1.0 | 5.3 | 2.9 | 282.5 | 39.6 | 39.6 | |
| Utilities | 500-700% | 65-75% | 0.5 | 0.7 | 2.2 | 0.7 | 95.4 | 15.3 | 15.9 | |
| Healthcare | 300-320% | 70-80% | 0.1 | 0.8 | 4.8 | 3.6 | 225.7 | 29.3 | 33.6 | |
| Real Estate | 600-900% | 40-50% | 0.1 | 0.3 | 12.4 | 0.9 | 187.6 | 18.8 | 15.1 | |
| Telecommunications | 450-500% | 70-80% | 0.2 | 1.6 | 1.6 | 0.8 | 110.3 | 16.5 | 16.0 | |
| Energy/Oil & Gas | 700-900% | 40-60% | 0.5 | 1.2 | 3.1 | 1.0 | 218.9 | 28.5 | 27.5 | |
| Professional Services | 40-60% | 75-85% | 1.0 | 0.4 | 1.3 | 2.2 | 150.2 | 21.0 | 21.8 | |
| Restaurants | 120-150% | 85-90% | 0.9 | 0.3 | 0.6 | 0.7 | 58.1 | 7.0 | 7.5B | |
| Transportation/Airlines | 400-500% | 80-90% | 0.1 | 0.9 | 1.7 | 1.1 | 85.7 | 12.0 | 11.6 | |
| Mining | 550-700% | 50-65% | 0.5 | 1.7 | 0.9 | 0.4 | 76.4 | 11.5 | 11.3 | |
| Wholesale Trade | 200-250% | 70-80% | 0.1 | 3.0 | 1.8 | 1.5 | 290.5 | 37.8 | 46.8 | |
| Media & Entertainment | 250-300% | 65-75% | 0.1 | 1.5 | 1.4 | 0.8 | 95.8 | 13.4 | 13.4 | |
| **Total U.S. Economy** | **260-280%** | **65-75%** | **-** | **-** | **64.0** | **22.6** | **3,370.0** | **400.0** | **421.3** | |
I'll add a column for the reinvestment amounts by industry in billions of dollars.
Based on the model results, I've calculated the reinvestment amounts by industry and category when applying the 100% deduction for reinvestment. Here's an analysis of the findings:
## Reinvestment by Industry (Billions $)
|Industry|Annual Profit|Reinvestment Rate|Reinvestment Amount|Tax Reduction|
|---|---|---|---|---|
|Technology|$390.2|56.0%|$218.5|$30.4|
|Financial Services|$451.3|31.0%|$139.9|$17.2|
|Manufacturing|$282.5|42.0%|$118.6|$16.6|
|Healthcare|$225.7|44.0%|$99.3|$14.8|
|Wholesale Trade|$290.5|34.0%|$98.8|$15.9|
|Energy/Oil & Gas|$218.9|40.0%|$87.6|$11.0|
|Retail|$170.8|35.0%|$59.8|$9.8|
|Professional Services|$150.2|37.0%|$55.6|$8.1|
|Real Estate|$187.6|29.0%|$54.4|$4.4|
|Telecommunications|$110.3|44.0%|$48.5|$7.0|
|Media & Entertainment|$95.8|45.0%|$43.1|$6.0|
|Utilities|$95.4|41.0%|$39.1|$6.5|
|Transportation/Airlines|$85.7|39.0%|$33.4|$4.5|
|Mining|$76.4|43.0%|$32.9|$4.9|
|Restaurants|$58.1|36.0%|$20.9|$2.7|
|**TOTAL**|**$2,889.4**|**39.8%**|**$1,150.4**|**$159.7**|
## Reinvestment by Category (Billions $)
|Category|Total Amount|% of Total Reinvestment|
|---|---|---|
|Physical Equipment|$314.9|27.4%|
|R&D Expenses|$213.6|18.6%|
|Software Development|$207.3|18.0%|
|New Hiring|$183.7|16.0%|
|Employee Training|$135.5|11.8%|
|Sustainability Improvements|$95.5|8.3%|
## Key Insights:
1. **Technology Leads in Reinvestment**: The technology sector would reinvest the largest amount ($218.5 billion), despite not having the highest annual profits. This reflects their higher reinvestment rate (56%) compared to other industries.
2. **Financial Services Has Lower Reinvestment Rate**: Despite having the highest profits ($451.3 billion), the financial services sector has a relatively low reinvestment rate (31%), resulting in $139.9 billion of reinvestment.
3. **Human Capital Focus**: When looking at the category breakdown, a substantial portion of reinvestment goes to human capital development:
- New Hiring + Employee Training combined represent $319.2 billion (27.8% of total reinvestment)
- This significant investment in people aligns with the human flourishing goals
4. **Innovation Investment**: R&D Expenses and Software Development together account for $420.9 billion (36.6% of total reinvestment), showing strong support for innovation.
5. **Physical vs. Human/Digital Assets**: Physical Equipment represents the largest single category ($314.9 billion, 27.4%), but human capital and technology investments combined make up a much larger share.
6. **Sustainability Gets Significant Investment**: Despite being the smallest category, Sustainability Improvements still receive $95.5 billion (8.3%) in reinvestment, which represents a substantial commitment to environmental goals.
This data demonstrates how the 100% reinvestment deduction effectively redirects significant capital ($1,150.4 billion) toward productive investments while reducing the tax base by $159.7 billion. The distribution across categories shows strong alignment with the human flourishing goals outlined in the original proposal, particularly in human capital development (employee training and new hiring) and innovation (R&D and software development).
### Challenges
- robust asset valuation frameworks
#### Current Economic Distortions
- Debt-Equity Bias: debt interest payments are deductible where equity dividends are not. Increases leveraging and economic instability.
-
#### Economic Stability
- Consumption changes precede income changes by 3-6 months, so the tax base is more sensitive to economic downturns. Prebate provides a floor of basic needs economic activity.
- the government budget for a surplus in good times and a deficit in bad times
- ? what is the optimum role in stabilizing the government?
### History of Federal Debt
| Fiscal Year | Total Revenue (Trillions) | Total Expenditures (Trillions) | Budget Surplus/Deficit (Trillions) | National Debt (Trillions) | Interest Payments (Billions) | Interest as % of Expenditures |
| ----------- | ------------------------- | ------------------------------ | ---------------------------------- | ------------------------- | ---------------------------- | ----------------------------- |
| 1995 | $1.35 | $1.52 | -$0.17 | $4.9 | $232 | 15.3% |
| 1996 | $1.45 | $1.56 | -$0.11 | $5.2 | $241 | 15.4% |
| 1997 | $1.58 | $1.60 | -$0.02 | $5.4 | $244 | 15.3% |
| 1998 | $1.72 | $1.65 | +$0.07 | $5.5 | $252 | 15.3% |
| 1999 | $1.83 | $1.70 | +$0.13 | $5.6 | $230 | 13.5% |
| 2000 | $2.03 | $1.79 | +$0.24 | $5.7 | $222 | 12.4% |
| 2001 | $1.99 | $1.86 | +$0.13 | $5.8 | $206 | 11.1% |
| 2002 | $1.85 | $2.01 | -$0.16 | $6.2 | $184 | 9.1% |
| 2003 | $1.78 | $2.16 | -$0.38 | $6.8 | $153 | 7.1% |
| 2004 | $1.88 | $2.29 | -$0.41 | $7.4 | $160 | 7.0% |
| 2005 | $2.15 | $2.47 | -$0.32 | $7.9 | $184 | 7.4% |
| 2006 | $2.40 | $2.66 | -$0.26 | $8.5 | $226 | 8.5% |
| 2007 | $2.57 | $2.73 | -$0.16 | $9.0 | $237 | 8.7% |
| 2008 | $2.52 | $2.98 | -$0.46 | $10.0 | $253 | 8.5% |
| 2009 | $2.10 | $3.52 | -$1.42 | $11.9 | $187 | 5.3% |
| 2010 | $2.16 | $3.46 | -$1.30 | $13.6 | $196 | 5.7% |
| 2011 | $2.30 | $3.60 | -$1.30 | $14.8 | $230 | 6.4% |
| 2012 | $2.45 | $3.54 | -$1.09 | $16.1 | $220 | 6.2% |
| 2013 | $2.77 | $3.45 | -$0.68 | $16.7 | $221 | 6.4% |
| 2014 | $3.02 | $3.65 | -$0.63 | $17.8 | $229 | 6.3% |
| 2015 | $3.25 | $3.69 | -$0.44 | $18.1 | $223 | 6.0% |
| 2016 | $3.27 | $3.85 | -$0.58 | $19.6 | $240 | 6.2% |
| 2017 | $3.32 | $3.98 | -$0.66 | $20.2 | $263 | 6.6% |
| 2018 | $3.33 | $4.11 | -$0.78 | $21.5 | $325 | 7.9% |
| 2019 | $3.46 | $4.45 | -$0.99 | $22.7 | $375 | 8.4% |
| 2020 | $3.42 | $6.55 | -$3.13 | $26.9 | $371 | 5.7% |
| 2021 | $4.05 | $6.82 | -$2.77 | $28.4 | $392 | 5.7% |
| 2022 | $4.90 | $6.27 | -$1.37 | $30.9 | $476 | 7.6% |
| 2023 | $4.92 | $6.75 | -$1.83 | $33.2 | $678 | 10.0% |
| 2024 | $5.00 | $6.80 | -$1.80 | $35.0 | $952 | 14.0% |
**Notes:**
- **Interest Payments:** These figures represent the federal government's net outlays for interest on debt held by the public.
- **Interest as % of Expenditures:** This column shows the proportion of total federal spending allocated to interest payments each fiscal year.
**Observations:**
- In the mid-1990s, interest payments comprised a significant portion of federal expenditures, peaking at around 15.4% in 1996.
- This percentage declined in the early 2000s due to