Post 8 of 20: Convert half of Value Added Tax proceeds to MC shares!
Proceeds from Value Added Tax form a major share in Phil. govt. income. As historical reports show, much of said income end up in the pockets of relatively few corrupt politicians thru their squads of State contract 'facilitators', the rates rising from 10% of project cost in the 1950s to 50% currently. Considering anti-poverty requirements, said trillion-peso proceeds enriching so few are better used to set up wealth-making businesses that create jobs for the country's 60+ million bottom poor. Concurrently, the investment windfall should rain down additions to profit dividends acquired by the local masses of employee-shareholders as a consequence of their MCs' expansion of production assets. Here's how the scheme works:
ME Infinity Formula 4: VATCOS Law: Target: Re-channel half of Value Added Tax towards production instead of old-style Philippine regimes' politics-based 'spend all' tradition.
[60M voter-strong MC Movt & its govt reformed by charter change] enable passage of [50% VAT to Co-op Shares (VATCOS) law] whereby the state channels [half of VAT proceeds] towards purchase of [MC capital shares] that are [titled to the State] thereby raising [more endless trillions of pesos in MC capital assets] that help create [endless thousands of MC JVs with local & 1st World cos.] while enabling the State to earn [endless trillions in MC profit dividends] & the entire program helping create [millions more jobs for bottom poor] + [endless trillions more wealth flowing to investing masses & allied cos] + [more expansions in State incomes due to expanded tax base (including upstream & downstream industries to micro scale)] + [endless billion-ton reductions in global warming gases] as a consequence of [MC corporate groups' world-scale clean & green industries]
Q1: Why should VATCOS-created MC share titles go to State instead of to taxpayers? A1: Taxes spent for production will greatly multiply State incomes if handled by mega co-ops managed by the country's top retired corporate skills and their foreign techno-savvy counterparts in JV companies. If handled by lawyer-politicians as in ages past and under current systems, such tax trillions will end up spent on 'muffin' roads to nowhere, bloated bureaucracies, 'facilitation fees' at 50% of budgets, substandard housing for victims of calamities, and other scandalous, poverty-maintaining activities. The VATCOS law addresses the tragedy and provides a premium: 50% VAT tax proceeds 'lost' by govt get invested in thousands of mega co-op corporate groups that build numerous world-girdling industries. All will pay multiple types of taxes and other impositions at quadruple or quintuple the initial State 'loss'. Additionally, they will yield endless trillions in profit dividends titled to State. Helping the State earn a lot more should concurrently help mega co-ops in the form of expanded & appropriately targeted infrastructures and other projects that help raise productivity.
Q2: Will the new businesses' and masses' expanded spending (due to high incomes) create inflation? A2: Massive spending within the economy will hardly raise prices because: (a) voluminous production and numerous product choices will limit individual products' price-increase tendencies due to softened demand per product as a consequence of massive choice competition; (b) 80-90% of local production will be exported, which means the right volumes of goods in local markets, thereby balancing inflation & deflation forces; (c) the masses earning dividends and enjoying the rise of stock shares' market values will make them prefer to invest more in MCs to earn more rather than waste money on luxuries and frivolities 'before prices further rise'. The resultant lowered demand for goods will dampen price rises; (d) employees part-owning MC corporate groups will likely initiate price discount and subsidy policies for their own purchase of Group products. For instance, all MCs producing rice & processed food products at subsidized prices for investors will end the country's 90% dependence on such currently imported necessities. Inter-industry group discounting will further bring down local prices for involved masses. High-priced (at peso rates) exports of 90% production will finance the subsidies.
Q3: Will the govt lose trillions in current VAT income because of the VATCOS law? A3: On the contrary, the govt will gain income by 10-20x more because of the million-level creation of new businesses from large to micro, all paying half-VAT + import & export taxes, business permits, franchise and license fees, land tax, capital gains tax, local govt taxes, specific and ad valorem taxes, fuel and power taxes, as well as interest income from State banks' loans, profits from State corporations, proceeds from State land leases, fees from monopoly franchises, mining and quarrying fees, agroforest joint venture shares, taxes on ballooned tourist spending, JV dividends arising from the VATCOS law, and scores more income sources. Everyone should win with the VATCOS law!
Q4: Why should the VATCOS law be passed at post charter change period? A4: Said law will convert yearly tax take by 30-40% into MC capital shares owned by State. If submitted as a bill under a traditional (current) congress, it has zero chances of winning, as it will re-channel trillions in six-year tax proceeds off the hands of politicians eager to skim off 50% or more out of said proceeds thru 'standard' commissions from their project beneficiaries. Conversely, a post charter change VATCOS law will add yearly trillions in capital to production-oriented MCs for use in generation of jobs & wealth versus mass poverty & global warming. The remaining half of VAT cannot be subjected to skimming due to limits imposed by a Bid Awards & Controllership Body discussed later in this blog. Surprisingly, the VATCOS law will instead triple or quintuple State budgets due to scores of other tax impositions (import taxes, licenses, capital gains tax, taxes on luxuries, land taxes, etc.) incident to set up & expansion of millions of tax-paying MC corporate groups & related businesses large to micro that together penetrate world markets. Additionally, State budgets will further expand out of trillions in yearly profit dividends issued by said MCs. Concurrently, the total absence of ways to earn fortunes out of State tax take thru corruption will effectively prevent old-style political parties from budgeting billions to win elections that promise no material returns. Only leaders who truly want to serve the country despite resultant limited income will win elections.
Read next post that describes a reward scheme granting free mega co-op shares to individuals or groups who recruit investors in mega co-ops and/or their joint venture companies. (For Android cellphones, swipe screen up & down, tap arrow at left of title, and tap Post 9: Enable Mega Co-op Movement Recruiters to Get Free Mega Co-op Shares)
Donate to help promote our MC Movt: Philippine Banco de Oro savings account no. 0001 4030 7842 Account name Fermin B. Francisco, thru Xoom, Cebuana Lhuillier, Ria, etc. or direct deposit. Fermin's cellphone nos: 0927 689 2691 or 0928 995 2041 (replace 0 with 63 if abroad) or email fermin4megacoops@gmail.com.