Here I will address the means to achieve elimination of taxes, and realization of Zero Cost Government.
No taxes, doesn’t that mean no government? Do I propose no government and therefore anarchy?
And must we survive without the things government provides:
- Schools
- Public safety
- Fire departments
- Roads, etc.
No.
Then how is Zero Cost Government to be achieved?
There is another way a practical way, and a realistic way.
The way is through a sovereign wealth fund, in fact expansion of and wide use of the sovereign wealth fund concept.
What is a sovereign wealth fund? It is public money invested to earn money that can then be used to fund the government, or even be returned directly to the people as a dividend - with a dividend paid to each and every citizen (with some exceptions). The dividend might then be used to pay all taxes, or if large enough used to cover any and all other living costs.
A hundred governments around the world and three states have SWFs already. Dubai has the largest, $600 billion dollars plus.
Alaska has the largest in the United States: $38 billion in 2009.
By allowing governments to invest money (but not necessarily own or control the businesses they invest in) government expenses can be paid by the returns on these investments. What is the alternative? Let all of the profits of investments flow into private hands and then taxing, or trying to tax these private earnings with all of the attendant problems and difficulties that entails.
Alaska currently has no sales tax, no state income tax, and low property taxes, and in 2008 paid every citizen $3,800, more than enough to cover the property tax costs of most landowners and enough in many cases to cover the cost of federal Income taxes.
It is possible to imagine a day when Alaska has enough money in their sovereign wealth fund (through growth of the fund) that all of the cost of government federal, state and local can be covered by the fund - while still paying a regular dividend.
Voila, Alaska will have Zero Cost Government.
Where does the money come from? From oil revenues. Alaska has chosen, rather than let all of the profits of oil to go into private hands, to direct some of it into public hands, and therefore fund public expenditures, taking the burden of government costs off the shoulders of the citizens of the state.
Alaska, in studies, has been shown to be the most egalitarian state in the United States, with much lower disparities of wealth - differences between rich and poor - than in any other state.
I regard this as a good thing, much more like the very democratic early American Republic and less like the banana republics common in Central and South America - which have a lot of poor and a few rich who hog all of the wealth and resources. America today with more billionaires than ever and the middle class wealth and incomes stagnant or in decline is beginning to resemble a banana republic.
Michigan has no natural resources, you may think, no oil wealth to exploit to build up a sovereign wealth fund, should it be established.
You may say, once Michigan had vast forest, and millions of acres of empty land, and rich mineral resources. But no more.
Michigan perhaps, you may think, should have established a sovereign wealth fund while we still had these resources so that today our government cost could be covered and our taxes be low, or even zero. But no sovereign wealth funds existed by name until 2005 - though sovereign-like funds have existed under other names for many years (the Alaska fund was established in 1978).
The fact is Michigan still has resources, and we should tap these resources for funding our government rather than let the profits go to owners that may be across an ocean, and already rich and spending it on luxuries when necessities at home such as police, and schools are not adequately funded.
Michigan resources: Wind, water, shale gas. Let us examine them individually.
Wind:
The state has extensive areas where strong winds blow - suitable for efficient generation of electricity - especially offshore along the Great Lakes.
Folks living along the shore object to these farms claiming they will ruin the view and possibly the tourist industry. And I believe some shores should be excluded, and where permitted - the farms set well offshore so they are lost in the haze.
Really the wind belongs to us all. Why let the profits of these farms flow to owners who may live a continent away? Our offshore wind farms would look a lot prettier to us, I believe if they are not owned by Dubai, or China, but by us, the profits flowing to fund our government, or even directly into our pockets as a dividend.
Water:Environmentalists and governments of Great Lakes states have all objected to selling of our abundant water. But if we have a surplus, why not sell the excess if the money helps fund our government - rather than disappear into private hands.
There are thirsty states eager for our water, and we could realize a good price, I believe, without in any way depleting or drawing down or Great Lakes.
Water could increase the productivity of these thirsty states, and lower food and bio-fuel cost for all.
We must use our water, and use it to enrich our state and all of the citizens of our state, and to fund our sovereign wealth fund.
Shale Gas: Beneath our state is a vast reservoir of natural gas locked up in the rocks. The reservoir is huge, a veritable Saudi Arabia beneath our feet. Until recently, locked in the rocks, there was no way to efficiently develop it, but new technology has made it possible.
Environmentalists object, with good reason, to the development of shale gas - for the extraction process if not done right can pollute the ground water, and maybe even the surface water. Imagine our beautiful Great Lakes polluted by oil shale development.
But if we are careful I believe we can cleanly develop this resource and use the profits to grow our sovereign wealth fund.
So you see, we still have natural resources, and future generations will thank us if we leave them a tax free state government adequately and securely paid for by our sovereign wealth fund.
