Liability Rate

We take it for granted that the government can issue a limited liability license to corporations or citizens seeking to engage in enterprise. It is assumed that this is good for society because it creates economic activity that reasonable people would not engage in because the personal risks are too high.

I generally agree that we need the concept of limited liability, but I feel that society bears the brunt of catastrophes created when these corporations fail spectacularly. I feel that these companies should have a method of paying back the commons for granting them this limited liability.

The liability rate is a rate set for the decaying of the artificial capital away from the current owners who enjoy the limited liability. Each year, the set rate of decay should occur and the number of shares that decay should go to the central authority to be put up for auction. The public should be able to bid on these shares. Once a price has been set, the original owners should have the rights to buy back the shares at that price.

This may be a way to raise most of the taxes a government or central authority needs to raise and should drastically reduce the amount of pref taxation that is necessary.

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