The Self-Sufficient State

What should be eliminated is the excess of commissioned Government officials who mess up the State...

Luxury, strategy and essential services

< On overcoming tax models >

For the success of a Government Plan, and even better, of a State Plan, nothing is more necessary than a well-elaborated Administrative Doctrine, whose guidelines for the State System (that is, the revenue and expenditure devices) are the means to reach the envisaged objectives. Therefore, after all the criticisms I make, it is very natural that they ask, with some anxiety, what [after all] would be my solution. What has most frightened readers and listeners is the apparent contradiction in the fact that an austere defender of the State is also an enthusiastic zero tax activist. People, as a rule, believe that as the State is stronger and more comprehensive, the value of taxes is also increased. They also assume that when the State is rich, the individual is also oppressed.

This text intends, in paraphrase of William Blake's famous book – but abdicating poetics –, a marriage between the public and the private, starting with the following unusual statement: Only the very strong State can exempt from taxes!

Note that the minimal State, responsible only for education, health and defense, as the social democrats and neoliberals intend, is a tax State par excellence, since without state-owned companies, there is no revenue other than taxpayer money. On the other hand, a Developmental State, with economy companies spread across Brazil and the world, can, given the massive profits of its state-owned companies, exempt the national or even the international private sector (depending on the strategy).

Going into greater detail, we explain that through the profits obtained by the mixed economy companies (Petrobrás, Eletrobrás, Banco do Brasil and others that will be listed later), the government will be able to support its costs of essential services such as education, health and security. To get an idea of the very easy feasibility of the suggested model, note that Petrobrás' profit in 2010 was around 30 billion and the defense budget around 70 billion, that is, with only 6 state-owned companies the size of Petrobrás, the essential services would be financially provided for. Even today, the amount spent on basic services is so ridiculous that it does not exceed 10% of the total budget of the Union.

Our proposal divides the national economy into 3 different sectors: Basic, Strategic and Luxury. Basic services are education, health and security. The strategic ones are divided into infrastructure and development. They are made up of supplies, clothing, sanitation, utensils and furniture, that is, the minimum that human beings need for their survival. The means of acquiring resources is the contribution rate and the legal nature of state-owned companies keeps the capital closed.

The Development sectors, on the other hand, are those of extraction, industry, transport, urbanization, technology and finance, with the main purpose of profit, tariff policy, seeking revenue through mixed economy and publicly traded companies. The luxury sectors are all others, in which the State does not participate or compete with the private sector, allowing the maximum possible freedom, including tax exemption. The infrastructure and development sectors have the participation of the State, but without the monopoly and also with tax exemption for national individuals. We, through the patriotic spirit and the evil behavior of other nations, believe that customs protectionism is not only a necessary economic security measure, but also one of the main sources of revenue for the State, together with its state-owned companies.

As explained, the objective of our model is to obtain Brazilian revenue of 4.5 trillion precisely from these 12 sectors, which would give, in symmetry, approximately 400 billion for each sector and respective national state-owned company, with the largest source of expenditure being the Brazilian public debt , with more than 5 trillion accumulated and spending on social security, around 700 billion. Indeed, for the reader trained in economics or business, with a sense of orders of magnitude, it is clear that – although education, health and defense are not large expenses to pay – the overall value to be achieved is very challenging without tax collection. . However, we go step by step showing the solutions so that, gradually, we can reach the apparently unusual Self-sufficient State.

A first way to increase the power of the State [and consequently its revenues] is to double or triple the number of effective civil servants, since we have, proportionally, less than half of civil servants than the so-called developed countries. This may be astonishing to advocates of the Minimum State, but in fact, Brazil lacks civil servants. What really should be eliminated is the excess of government commissioned employees who, every 4 years, mess up the stability of the state service. Indeed, the Government's own interference in the State's business issues must become increasingly restricted, making the service henceforth become as autonomous as possible, not least because this reflects positively on the value of publicly traded companies in the international market.

On the other hand, one way to cut expenses is to lower the interest rate to the point of making it negative, so that our public debt (transformed in the past decade almost entirely into domestic debt with the issuance of Treasury papers) is well more easily liquidated. Of course, since it is more difficult to profit from financial speculation, rich people will feel motivated [or even pressured] to invest their capital in ventures. In this way, the State needs to facilitate the opening and expansion of companies through tax exemption, as we propose. If, on the one hand, the individual can no longer benefit from interest, a risky game due to the inflationary loss; on the other hand, with the absence of taxes, there is no loss in consumption, income or wealth.

Therefore, according to our target, 10 million new entrepreneurs would join the 20 million already existing in Brazil, and, as a result, around 30 million new jobs would be created. To put these numbers in context, before inadvertent criticism, we can say that of the 210 million inhabitants in our country, 50 million are under 18 years of age and 30 million are over 70. Of the 130 million adults, 30 million have a formal contract (of which 10 million of these civil servants), another 30 million are informal, accompanied by the 20 million entrepreneurs. We therefore have an idle mass of 50 million inhabitants.

Solutions for social security involve the elimination of a budget device for decoupling pension revenue by up to 30% for other areas, which should be strictly prohibited.

Another very important point is the excessive number of pension debtors and the exorbitant value of the amount coming precisely from highly profitable companies. Private companies alone, according to the recent CPI, owe around 500 billion.

A third point is that the Brazilian Constitution was impeccable in attributing different sources to Social Security, in particular, providing for 40% of the result of auctions of goods seized by the Federal Revenue Department. It is estimated that another 500 billion is withheld from public coffers a year, an amount that ironically is equal to the costs of education, health and defense. Furthermore, with multiple employee and employer contributions on salary and income, at the same time that we implement absolute full employment, the Social Security will also have a surplus, since the number of contributors will be greater than the number of beneficiaries.

The rigorous reader will certainly question the contradiction between defending zero tax and, at the same time, pointing to charging debtors as a solution for social security. However, the path to zero tax is staggered, where we first eliminate consumption tax to increase purchasing power, without changing the face value of the minimum wage; however, we are relentless against debtors of income and assets within the current legislation. In a second moment, as soon as investments in state-owned companies are giving the intended return, the wealth tax is withdrawn, not least because, in our Public and Private Equilibrium System, the monetary backing is the country's assets. Thirdly, to reach zero tax, in favor of the national individual, we exempt the citizen from taxes on income. Social security contributions, which strictly speaking are not taxes, would be the last taxes to be abolished, when full employment was at its peak.

Employment fullness, in turn, can only be achieved by filling the productive gaps of our economic system, in particular, with the implementation of the national automobile industry, until today, shamefully absent. The State must found, promoting a partnership between universities and the Superior School of War, AUTOBRÁS; mixed economy Brazilian automobile company with the purpose of enriching the State and individuals to achieve profits similar to or greater than the 20 billion annually of Chevrolet and Volkswagen. In addition to profit, we guarantee the entire production and technology chain generated by automobiles and their respective accessories, not counting the clear possibility of export.

Another gap is found in civil construction, since of the 60 million urban properties, half do not have a deed, and, from there, we estimate a deficit of at least 10 million popular residences to be built by the future CONTRUBRÁS which, like AUTOBRÁS , is publicly traded; and whose main purpose will be a national urban restructuring plan, aiming at the total extinction of the favelas.

In the case of rural properties, of the existing 5 million, only 70,000 are large estates and that number needs to (at least) double. In our Agrarian Reform model, we need to use the 423 million hectares preserved in Brazil with sustainability and, furthermore, make the latifundium "unbreakable" below a thousand hectares, in order to avoid the use of mere subsistence, which is the annihilation itself of developmental economics.

With the three measures mentioned, we may have to import labor, but if the reader still incredulous about the possibility of State Self-sufficiency wants something even more daring, we present Mercantile Ecomilitarism: a State plan aimed at building Smart Cities, mainly in the Amazon , with military, ecological, university, industrial, commercial and tourist purposes under the guidelines of the Military and Economic Sovereignty of Brazil.

Brasilia was a magnanimous and centralized undertaking and, at the time, perfect for its purposes. Today, in addition, we propose exactly the opposite, that is, small cities inducing the centrifugal distribution of the population over the territory. The current federal capital cost [in corrected values] something close to 500 billion reais. With that same amount, we can build 500 cities with 5,000 homes each and an average population of 20,000, totaling 10 million inhabitants in all cities together, half of the workforce looking for a job in Brazil.

The military characteristic of the city occurs for some obvious reasons (for example, the protection of the Amazon): to avoid irregular construction in the territory, not to increase the cost of the municipal apparatus with more legislative chambers and, mainly, because the military have mastery in the construction of their villages, which this time – in addition to the defensive purpose – will also have a mercantile purpose.

We will create a simple and functional real estate development, with the sale and leasing of lots, commercial stores, industrial centers, farms, apartments and houses; so that we have immediate financial return or even before the compact cities are ready. The location of each one of them will consider, in priority, the natural wealth that can be exploited in a sustainable way, such as, for example, the abundant existence of ores. Transformation cities would therefore be in an integrated and intermediate position, as appropriate; Just like cities with a commercial and touristic bias, they will be in areas determined by the natural beauties of our exuberant country.

An alternative and very appropriate name for the type of military that we want to form within Mercantil Ecomilitarism is "Colored Berets": soldiers of citizenship.

This happens because, with the new mercantile characteristic of military actions (in addition to the increase in the country's economic capacity), the quality of life in socio-cultural aspects increases significantly. Moreover, in these cities, unlike what traditionally happens in the armed forces, women and people with physical disabilities will be accepted to work in the defense of the country. Women are survivors alongside men and their offspring from the earliest times (as should be assumed) and the bravery of them all cannot be questioned by a healthy mind. The Paralympic athletes show their superiority to the common human at each edition of the games, and, to complete, a great defense system does not depend only on infantry, cavalry and artillery to be efficient, but [as a base], on a huge network of supplies, uniform and ammunition manufacturing, as well as speed in logistics and distribution so that those at the front receive everything they need to win. In other words: administrative support.

The "Colored Berets" are a point of intersection between civilians and the military, that is, an employee of the human resources framework of the armed forces, but with infrastructural and developmental activity.

Brushing up on some of the positive side effects of our plan, from a social point of view, the mass inclusion of the proletariat in the framework of the armed forces will immediately result in the acquisition of benefits such as a health plan and various aids, sparing the State from welfare practices. From the perspective of optimizing administrative processes, we assume that the direct execution of works by the Public Administration minimizes corruption, ordinarily exercised through outsourcing and falsification of invoices. In addition, with the methods enshrined in the military culture, we want to improve the discipline of civil servants and, as an extra advantage, decrease the idleness of military forces, since they are used for mercantile purposes. We also have to emphasize the mission of each of the armed forces in producing their vehicles, vessels, aircraft and weapons, since the division of the main forces itself stems from the respective logistical means.

Finally, the criterion for public administration action is very simple, following beyond the collective interest and strategic importance, the possibility of broad competition and the ability of individuals to bear costs and responsibilities. There is no way to promote broad competition in transmission or sewage lines; only monopoly per stretch is possible. Private individuals will not risk billions building a dam to earn a net return in 30 years. Society has its origin in the intelligent organization of several families that constitute the State for their own well-being, that is, undertakings that need to be done together.

To summarize what has been said, the Self-Sufficient State has its Customs, Financial and Monetary System as a source of income, through the Ministry of Finance directly and through the National Bank; and equally, the income from the other 11 infrastructure and development companies that are part of the Indirect Public Administration are input resources. Assuming here, with the improvement of efficiency, the doubling of the number of public employees, and the internationalization of services, each mixed economy company can easily profit 300 million a year and public companies, half of that. In an easy calculation (without even assuming our requested intervention), we find that with a current per capita income of 35,000 reais, each person will spend [with tariffs and fees] around 10,000 reais per year; the State would receive, internally alone, more than 2 trillion reais. In conclusion, excluding the Public Debt, expenses for 2021 were estimated at the same amount and, therefore, returning to our premise, which perhaps should be the title of the text, we assume that it is proven that only a very strong State can finally exempt from taxes, because in the abundance of resources does not need to charge the national private: The State is Self-sufficient.

Patriotic Greetings,

Douglas Mattos.

Philosopher.