Unconscionable profits funding universal wellbeing

December 15, 2023

Accountants cannot report “unconscionable profits” that are more than the incentive to invest. This is because accounting doctrines do not require the time horizon of investors to be reported. What is not reported cannot be taxed. Introducing boomerang ownership gets around this problem. The tax incentive would provide shareholders quicker, bigger, less risky profit sooner, on condition that they changed the corporate constitution to allocate a small fraction of their equity by book entry each year to a citizen stakeholder account. This would allow local citizens to become endowed with shares each year.

The government would gain new tax revenues from citizens receiving dividends from shares and/or reduce its welfare costs. In this way, the revenue cost from providing the incentive could be recovered to make the incentive self-financing. This allows the incentive to be increased to a level that would allow five percent of total shareholders’ equity to be endowed each year to citizens in the electorate of the politicians providing the incentive.

Firms would grow by dividend reinvestment plans in new “offspring” corporations providing continuity for executives, and investors. New investment could be attracted with locally owned and controlled human-scale businesses.