CC: Sen. Krysten Sinema
Council of Economic Advisors
US Treasury, US Dept. of Justice

S: How to pay for your economic initiatives

Dear Mr. President:

It has heen widely reported in the media that you intend to tax the wealthy to pay for your economic initiatives. Further, Sen. Sinema objects at least in part to taxing that group to pay for them. Here is a two-step solution that shows how to pay for all your initiatives without taxing anyone's current wealth or income.

Step #1. Direct the U.S. Mint to create three coins worth $1 trillion dollars each. Each would be legal tender under current laws. This step would avoid the need to raise the debt ceiling. The coins would be held in safe keeping by the US Treasury until such time as they can be retired under Step #2. This is not a joke. It has been discussed in the past, and there are no legal barriers that could stop it. Run the details by and through your Council of Economic Advisors, the US Treasury, and the Department of Justice.

Step #2. The coins could be retired by tapping a future flow of wealth equal to the actual amount of spending in all your initiatives. This flow of wealth does not currently exist, thus it is not owned by anyone. It would come from future payments that accrue to just the stocks, bonds, and real estate that are inherited by individuals, corporations, or other entities above $5 million from the estates of deceased individuals over the next 10 years. This wealth currently is both unearned and untaxed. Only future dividends, interest, and rents, plus capital gains that are paid on the those inheritances would be used to pay for your initiatives. Here is the math:

Current wealth of the top 10 percent:           $124 trillion
Future wealth on that same wealth pool
in 10 years at 7.2% CAGR: *                        $124 trillion

Tax assessed over 10 years (at 2.4%):            $3 trillion

Net to inheritors:                                            $245 trillion
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* 7.2 percent CAGR is the long-term return on US wealth.

Not even King Midas would miss a paltry $3 trillion slow down over 10 years on a stack that is $248 trillion high. To account for inflation on that debt, the Treasury would need to collect $3.657 trillion, but that is just a tiny detail.

/s/

Edward Phillips, Ph.D.