Loveganism – Food Sans Violence




Around 2500 years ago Gautam Buddha advocated compassion and non-violence to all life including animals. This led to a large number of persons adopting a vegetarian life style in South Asia. In recent times the concept has spread further, across the globe.

A traditional vegetarian diet consists of not consuming any meat or fish. However milk and its products are consumed freely. In a traditional vegetarian diet eggs are not consumed since these too are regarded as a flesh food. Vegans on the other hand go further and consume no animal product at all including milk.

Some years ago, this author proposed the concept of Loveganism that included eliminating or at least minimizing violence to all life, not just animal life but also plant life. Lovegan foods are foods that conform to this principle. Since the introduction of the concept online a few years ago, it seems that some have taken up loveganism in different parts of the world. A fresh note summarizing the older ones would therefore be useful.

At first glance, it may seem that loveganism would lead to a highly restricted diet but it is in fact not so. All it requires is love for both animal as well as the green side of life. A Lovegan diet is easier and healthier than both vegetarian and vegan since milk and eggs are part of lovegan food provided they can be produced compassionately. In traditional farming homes a small number of cows or hens are kept as free range pets and consuming some of their milk or eggs does not involve cruelty to the animal. Some modern farmers have also devised compassionate forms of larger milk dairies and poultry farms that permit the cows or hens to roam to over fenced enclosures.

As regards the plant kingdom, it may be noted that food grains such as wheat are collected when wheat grass has completed its life cycle and hence bread is a lovegan food as are lentils, fruits, nuts and a whole range of vegetables that do not involve killing the entire plant. Potatoes and peanuts may be collected after the plant dries out or begins to do so. Vegetables such as lettuce, cabbage and cauliflower involve cutting the plant and are therefore not a part of lovegan diet. Leafy vegetables are lovegan food provided the entire plant is not plucked out but leaves are taken selectively and periodically as new growth comes up. Plants produce leaves far more abundantly than humans produce hair.

Therefore, a lovegan food eater has a wide range of foods to select from and can attain a life style that is healthier than both vegetarians and vegans.

A Wise Precaution

For those contemplating a vegetarian or lovegan life style, it may be mentioned that the human body takes time to adapt and one may suffer in health by suddenly giving up on meat. The sensible way appears to be to cut down the number of times in a week meat is consumed bringing it down to once a week over several months as the first step. This would give the body time to adjust as also an opportunity to learn about alternatives. Only when one has become comfortable with that should one consider giving up on meat altogether. It may be noted that taking up any system of thought in a fanatic way does not appear to be wise in most thing, especially not food. Even after one has become a vegetarian, if occasions arise when one is visiting, eating out or emergencies, one should accept whatever is available or appealing in a spirit of gratefulness. In the eventual analysis any food does good to one’s soul if we use our life and energy in contributing good to the world.

An interested reader may find a lot more discussion on the subject at the following link:

Refugee Absorption Potential of Different Countries



At the present time the world is grappling with an unprecedented refugee crisis especially due to instability and destruction in Syria. A large number of refugees have now run away to neighboring countries of Turkey, Lebanon and Jordon but since many are neither finding any permanent shelter there nor work or assured food year after year and children are having to grow up without any reasonable avenues of education many have started making their way towards Europe, the only nearby region at peace accessible to the refugees. Just today on the media a Minister from Hungary has said that Europe must not be made to suffer the burden alone but being an International issue it should be shared by the world, this being an International problem. The proposal is up for discussion in UN soon.

The question then arises is that if the world agreed to share the refugee burden how should they be distributed? Some countries are too poor or too small to accept any refugees; some have their own huge populations such as Bangladesh. There is a need to find a simple and just criterion that can measure the refugees absorption potential of any country in a fair and quick manner. In fact such a number is fairly simple to define realizing that the refugee absorption potential of different countries is proportional to their GDP and Land area and inversely proportional to their own population. Thus we may define the Refugee Absorption Potential Number, RAP as

RAP = GDP x Land Area of Country / Population of Country

Stated in words this criterion is simply saying the following:

The more the GDP of a country the more capacity it has to take in refugees, and more the existing population density of a country the less its capacity to accept refugees.

The land area may be measured in square kilometers and GDP is millions of US Dollars.  With the present units the right order of magnitude of numbers is obtained with 1 refugee for the least able countries and in thousands for the most able with a total of around 1.5 million.  Thus if a country has twice the RAP number as compared to another country it has the potential to absorb twice the number of refugees. It is a different matter if it agrees to or not. Countries that agree to opt in and share the burden then may share a given number of refugees in proportions of their RAP numbers.

It would be nice if someone out there can calculate the RAP number for all the countries of the world, so that the world may view the potential in this regard of different countries that make up our world. Perhaps the Hungarian Minister can do the calculation quickly and present it to the UN. Some quick approximate ones are presented next for the purpose of illustration for a few countries only.


as an illustration an approximate calculation of RAP was done to distribute 1.4 million refugees according to RAP. This is only a first approximate attempt for illustration and if the proposal is used, fresh accurate ones must be done with recent data. The present calculation was also a quick one with no time to check carefully and may have errors.  The input data is as online at:


How to Reform the UN



Continuing conflicts in the world are proof that UN has not been an effective mechanism in curbing tragic conflicts in the world. The power of veto by one or other member has stalled progress. The world would be a safer place if the following two reforms can be made to the UN

I The Power to override vetoes

The general assembly of the UN must be granted power to override vetoes on resolutions of the Security Council by a two third majority vote. This is only fair since just a handful of nations must not control all the powers of the UN

II Making Votes of General Assembly more democratic

Presently in the UN general assembly very small nations as well as the largest ones have an equal vote of one. This does not lead to a very representative decision. The problem can be easily fixed by making votes proportional to population of different countries, not exactly but as shown in the table so that the smallest of nations also have one vote and the largest no more than 10.

Proportional votes in UNGA

Proportional votes in UNGA

Nations that do not pay their prescribed contribution to the budget, say 1% of their GDP in a particular year would have their voting rights suspended in the following year.

With the two reforms as stated here the world can move faster to end conflicts that have been erupting in different parts of the world from time to time.

Segregation of refugees as Group A and B is essential need


As instability continues in many countries of the world, most notably Syria at the present time, many humans are fleeing home and country to arrive at the doors or borders of another country. While the host countries struggle with the issue as to how to deal best with the problem, one very basic and fundamental point is being missed in places, a point that should really have been obvious from the start.

The point is of is separating refugees in two groups termed here as Group A and Group B. Both groups require a different treatment, can be easily identified and would not only ease the situation of dealing with refugees but also reduce human distress hugely. This is how the two groups are defined


Group A: These are families consisting of parents and children, single parents with children, unaccompanied minors or orphans and single women

Group B: These are adult men or groups of adult men

It would seem obvious that group A requires priority processing and treatment since it includes the most vulnerable of humans including children and babies. They require maximum assistance too. Group B on the other hand can put up with greater hardship. This latter group also requires scrutiny to weed out economic migrants and potential terrorists or gang members that may be trying to sneak in to other countries.

In holding facilities and camps too there is a need to divide the area in two separate parts for these two groups. It would then also minimize the risks of crime against children and women that can take place in any human habitation and increase the security of all.

Refugee child offering biscuit to police blocking path. Image source:

Refugee child offering biscuit to police blocking path. Image source:

While some in Europe, in particular Germany, Sweden and Austria are doing a lot to help  refugees from Syria, they cannot do it alone. If other large countries with space and means such as Saudi Arabia, USA, Canada, Australia and Russia can come forward to to help refugees in camps near Syria, it would be a great relief. In particular help is needed urgently for Group A refugees (families with children and children alone)

A Plan to end the World Refugee Crisis – PHICS and beyond


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While many parts of the world live in peace, there are countries suffering from turmoil and war for prolonged periods, in the worst cases such as in Syria and Iraq, huge numbers of humans including the old, women and children are compelled to leave their homes and flee either within their own countries or to other countries. When persons are displaced within their own countries, it may be regarded as primarily an internal problem of that country, although in humanitarian interest other countries may try to counsel or influence it to resolve the issue. When huge numbers of humans flee the country and arrive in other countries, it no longer remains an internal problem of that country but becomes an International one. What can the world do about it? Existing international mechanisms such as the United Nations have clearly failed to resolve such issues and a new plan that works is urgently needed.

The world community must come together to alleviate the distress of humans.

Concerned at the situation in places like Somalia, Sudan, Iraq and Syria this author had applied his mind to the crisis in 2013 and proposed a plan called PHICS here

It consisted of the following;

1. If there is chaos, disorder, massive loss of life and human displacements from any country of the world on a continuing basis for a period longer than a year that has caused refugees to flee not just their homes but also their countries in hundreds of thousands, then such a country should be declared as a failed state in need of international intervention and supervision by force if necessary.
2. Such a country shall be placed under international governance, imposed if necessary by an international force for five years
3. During these five years a new standard prepared constitution shall be imposed and supervised elections shall be held while every attempt is made to restore order. The constitution can later be modified by a two third majority of the elected representatives and the country shall be handed back at the end of these five years but the next two elections shall also take place under supervision.

This is only the initial draft for discussion stated very briefly. It may be finalized after debate and safeguards stated. An appropriate forum for such a debate is the general assembly of United Nations. The only alternative to a new law as described here and termed as PHICS for the world is to host millions of refugees from disturbed countries and in the long run create disturbances in their own countries. The world suffers as a whole when there is any significant suffering in any part and the only few who gain are the dealers and makers of arms

How to Overcome Obstruction

Whenever any major change is proposed in the world, some country or person may have its own legitimate objections. The power of vote and democracy is able to override such objection. However the UN has been unable to do this because of the power of the veto held by a few select nations. PHICS cannot work if the power of veto continues in the present form. In case of a veto, the matter must be sent to the General Assembly again and if two thirds of the members propose, it should be abolished.

The Unique Situation of Iraq and Syria

While PHICS is proposed to be applied country wise, there are times when the problems of two neighboring nations are intertwined and need a special joint treatment as in the case of Iraq and Syria. In this case what is required before imposing national constitution and elections is a year or two spent in reorganizing the borders of the country with a view to long term stability. For example, seeing the turmoil in Iraq and Syria it would be best to redraw the borders of these countries to create three countries, A Shia Country merging Shia portions of Iraq and Syria with connecting corridors.; a Sunni country similarly and Kurdistan merging Kurdish portions of Iraq and Syria. Such reorganization would also correct  historical errors in drawing country boundaries and one such has clearly  been made here. Such an exercise would involve an international body of experts and a final approval of the United Nations with power to override vetoes as described earlier


A new Kingdom is born – Piland

The Flag of Kingdom of Piland

The Flag of Kingdom of Piland

Today I was fascinated by a news report that an American has claimed a piece of the planet that apparently belonged to no country i.e. it was Terra Nullius. He has named it the Kingdom of North Sudan and declared himself as king. I do not have sufficient knowledge of International law to know how far this claim is valid or if it is a joke. However just for fun and as an experiment it is decided to repeat this exercise with a new Island that emerged earlier this year in the Antarctica along with an apparently previously unclaimed sector of the Antarctica – Marie Byrd land.

The name Pi Island has been tossed around for the new island because the day of it birth 3/14 and this name has inspired the name of the new Kingdom. Therefore, if not contrary to law, I claim this island, including it in this Kingdom of Piland, a new country that includes Marie Byrd Land and islands in that sector off the coast of Marie Byrd Land  declaring myself as the King Emperor of Piland. Presently the population primarily consists of visiting Penguins. :- ) but it shall eventually hopefully become a constitutional monarchy on the lines of UK with a written constitution in future. Until then proclamations of the King shall be law.

By this proclamation dated the 16th of July 2014, We the King Emperor declare Tsaven of the Duke of the Piland Island, i.e the newly emerged island. This honor being bestowed on him due to his revealing the island to the world at Subject to his acceptance of this honor.

Marie Byrd Land is the portion of West Antarctica lying east of the Ross Ice Shelf and the Ross Sea and south of the Pacific Ocean, extending eastward approximately to a line between the head of the Ross Ice Shelf and Eights Coast. It stretches between 158°W and 103°24’W. The inclusion of the area between the Rockefeller Plateau and Eights Coast is based upon the leading role of Rear Admiral Richard E. Byrd in the exploration of this area. The name was originally applied by Admiral Byrd in 1929, in honor of his wife, to the northwestern part of the area, the part that was explored in that year. (from Wikipedia)

All citizens of the world are regarded as adjunct citizens of the Kingdom of Piland, if they so desire,  and may visit freely without visa or restriction and live or visit the Kingdom of Piland if they wish provided they do not carry out any activity to damage the environment in any substantial way and do not hurt or kill any plant, animal or fish beyond what is required for their short term food, clothing or shelter needs. – By Proclamation of the King Emperor of the Kingdom of Piland  The creation of the Kingdom is an attempt to protect the planet from any unnecessary exploitation aside from an exploration of new innovative laws and practices.

The primary goal of creation of the Kingdom of Piland is to make contributions towards protecting and enhancing the environment of the planet.

Marie-Byrd Land

Marie Byrd Land, Kingdom of Piland

Marie Byrd Land in Antartica, image from ( modified before use here)
This file is licensed under the Creative Commons Attribution-Share Alike 3.0 Unported license.

 Assert your claim of citizenship to this new as yet experimental country (an experiment in International law) on Facebook merely by liking the page at


NOTE: Please register any sound objections, if any, that you may have to the idea of Kingdom of Piland as described here as a comment. If you do not, this Kingdom will become a reality

It goes without saying that as long as there is no fairly permanent human settlement and habitation in the Kingdom of Piland by persons who regard themselves as its citizens, the Kingdom must remain a merely symbolic thing or a game in virtual space or at best a first step only. Yet it is not impossible that an unexpected turn of events would make such a settlement possible. It would then become a physical reality.

 This appears to be similar to  —–^ “New Jersey v. New York, 523 US 767 (1998)”. US Supreme Court. May 1998. Retrieved 29 January 2010. “Even as to terra nullius, like a volcanic island or territory abandoned by its former sovereign, a claimant by right as against all others has more to do than planting a flag or rearing a monument. Since the 19th century the most generous settled view has been that discovery accompanied by symbolic acts give no more than “an inchoate title, an option, as against other states, to consolidate the first steps by proceeding to effective occupation within a reasonable time.8 I. Brownlie, Principles of Public International Law 146 (4th ed.1990); see also 1 C. Hyde, International Law 329 (rev.2d ed.1945); 1 L. Oppenheim International Law §§222-223, pp. 439-441 (H. Lauterpacht 5th ed.1937); Hall A Treatise on International Law, at 102-103; 1 J. Moore, International Law 258 (1906); R. Phillimore, International Law 273 (2d ed. 1871); E. Vattel, Law of Nations, §208, p. 99 (J. Chitty 6th Am. ed. 1844).”

Low Entropy Persons, Countries and Entropy Yoga


The basic purpose of life appears to be to evolve. In ancient times when civilization began, humans applied their mind to this notion. They came up with a large number of practices designed to improve body, mind and soul of humans. Many such practices were described by a common name Yoga. Depending upon the precise practice there are very many different types of yoga such as hatha yoga, kriya yoga, karma yoga and so on for the ways to improve body, mind and soul must be countless.

This author has had deep interests in both the physical sciences as well as spiritual sciences. As a result of this combination the author had described a form of yoga that emerged from an intersection of both these sciences and gave it the name Entropy Yoga. An interested reader can find it in one of the early posts of another blog

What was described was that everything we do or even think, increases a certain quantity in the universe as a whole called entropy. Processes and actions that generate less entropy are more efficient than those that generate higher entropy. This principle applies not just to living beings but also to machines. For example a high entropy automobile would guzzle up much more fuel than another one of similar specifications and size that is low entropy generating one.

Amongst humans we have high entropy persons i.e. those who generate a lot of entropy during the process of living, relatively speaking. Generally high entropy person are those who are dishonest, disorderly and unclean. In comparison a low entropy person is honest, clean, orderly and disciplined. Persons do not become high entropy or low entropy persons because they practice yoga consciously since many have not even heard of it but because it is their nature to do so. A low entropy person may easily be recognized as more evolved compared to a high entropy one. Some may ask what has honesty to do with evolution. It has, because look at a monkey it will steal a banana from your kitchen and hand without any compunction but most humans would think twice about it.

The lowest entropy person is a zero entropy person i.e. someone who generates no entropy at all in whatever he does. In science such a process is called an isentropic process. Therefore such a person may be called an isentropic personality. It is an ideal state and by definition there is only one isentropic personality in the Universe – God. Other beings may approach this state as they evolve but if they eventually reach this ideal they lose their individuality and become a part of the one and only Infinite being, a state also known as Nirvana by Buddhists. However since other processes and beings continuously increase the entropy of the universe as a whole, a day will come when the entropy of the universe would be unsustainable and require its annihilation.

When a large number of persons in a country are high entropy persons or if its governing structures and systems are high entropy processes then the country as a whole becomes a high entropy country, conversely it is a low entropy country. It goes without saying that high entropy countries are marked by disorder, corruption and inefficiency. High entropy countries are the undeveloped parts of the world or become so whereas low entropy countries are developed or soon become so.

At the present time it is perhaps some countries such as Switzerland, Denmark, Sweden and Germany that are the lowest entropy countries of the world. At one time UK, in the later Victorian era and after, was also a very low entropy country. These things change with time. In Asia Singapore and Japan are examples of low entropy countries.

At the present time perhaps Syria is the highest entropy country in the world. Sub-Saharan countries and South Asian ones are also some of the highest entropy countries of the world. High entropy countries are marked not just by the presence of disorder and uncleanness but also lack punctuality, constantly changing practices and schedules aside from all possible manners of disorder. During my life time the design of coins, telephone numbers and schedules of examinations has changes so many times in India that it is difficult to even enumerate. It goes without saying that train timings and every other time including those of meetings and wedding ceremonies are never ever punctual. On the other hand, I have lived in Canada too and during my life time the design of coins, university exam schedules and my old phone number has not yet changed, although they added a new coin called the Loony some decades ago. The first is an example of a high entropy country and the second a low entropy one.

It was not always like this in India. One of its earliest civilization, called the Indus valley civilization is an example of the lowest entropy civilization mankind has ever seen on the planet. Recently, India elected a new government. The new leader – Narendra Modi – appears to be a low entropy personality of a high order. Indeed the first aspiration he expressed for India was of cleanliness, a desire for a low entropy state. Perhaps under his leadership India will once again begin its long march to becoming a low entropy country.

Who is a Refugee and why some in America do not seem to know


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The 1951 United Nations Convention Relating to the Status of Refugees has adopted the following definition of a refugee: Any person who owing to a well-founded fear of being persecuted for reasons of race, religion, nationality, membership of a particular social group, or political opinion, is outside the country of his nationality, and is unable to or, owing to such fear, is unwilling to avail himself of the protection of that country“. The concept of a refugee was expanded by the Convention’s 1967 Protocol and by regional conventions to include persons who had fled war or other violence in their home country.

At the present time there are millions of refugees in different countries of the world. The numbers of refugees in Lebanon from Syria are over a million.

The American Issue:

While America has actively supported and even assisted other countries in the world to host refugees, it perhaps never realized that it would be any significant issue for America on its own soil (with the exception of Cuba).  America is separated from the old world and Africa by vast oceans and has two large countries on its Northern and Southern borders with no prospect of war or religious violence erupting in any major way to cause large scale human displacements. What America has had to contend with for long have been illegal immigrants who seek to enter America for economic reasons. Therefore recently when a large scale influx of unaccompanied children took place through America’s southern borders, many viewed this as an immigration issue rather than a refugee one. However an unexpected war is taking place in Central America, a war that America has supported, the Drug Wars. The scale of violence in some Central American countries exceeds the violence in 2008-12 in Iraq as quoted in a report at It has caused a large number of persons to flee across Mexico into America. While America must examine if some of these are refugees or illegal immigrants, when it comes to children unaccompanied by adults there is little doubt in any reasonable mind that the majority of these are in fact refugees. Some of the children are as young as three along with a somewhat older sister less than ten years of age. What do these children know about economic prospects? There is no place lovelier for a child than home and parents unless some terrible violence and fear moves them out of it. Children do know about love and fear very well. A UNHCR report describing these refugees is here

As a Party to the 1967 Protocol, the U.S. is obliged to recognize valid asylum claims under the 1951 Convention and 1967 Protocol. The Refugee Act of US of 1980 is the domestic legislation governing asylum law in the U.S. The Refugee Act codifies the obligations of the U.S. under the 1951 Convention and 1967 Protocol.



While America seems to be flustered over the issue it must note that when a small country like Lebanon, that is approximately one thousand times smaller than America and much poorer can host more than a million Syrian refugees, it would not be an impossible feat for America to host 0.05 million child refugees. Moreover these are traumatized children in desperate need. However, the first step is to recognize that these children are refugees and not immigrants and in no case are they illegal in absolutely anyway.


The UN appears to have endorsed the stand of this blog right from the start. According to it: U.S. and Mexico should recognize that this is a refugee situation, which implies that they shouldn’t be automatically sent to their home countries but rather receive international protection.”
For a full report see:


Proportional Tax – A New Method of Corporate Taxation


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Note by

Dr. Ashok Malhotra, Ph. D. UBC Canada, B. Tech., M. Tech. IIT Delhi


A new method of corporate taxation termed proportional tax is described. It is simpler than existing methods of taxation yet it appears to be powerful in implementing economic policy and directing corporate behavior in desirable directions. Proportional tax for corporations is different from proportional tax for individuals. While proportional tax for individual implies that they pay the same proportion of income as their tax, whatever is the level of income, for corporations it implies that they pay a tax at a rate that is proportional to their net profits.


While communism appears to have failed in most countries, capitalism has been more successful in meeting human needs and improving the quality of life of humans. However, it has not been an unblemished victory for capitalism. Problems have occurred because of an excess of greed or because of use of unethical practices to satisfy that greed. It may be pointed out that unethical practices are frequently more insidious than illegal ones. Illegal practices can be dealt with by law but it is impossible to deal with unethical practices until new laws are created to cover them. The huge compensations, bonuses and severance packages that senior executives of some corporation draw fall in the realm of unethical practices. It has led to the financial crisis of 2008. Unfettered greed of corporations have also led to rising inequalities that have forced some to homelessness while the wealth of the world has been captured by fewer and fewer individuals.

Various mixed models that combine elements of both, communism with capitalism, have also been attempted in parts of the world. Some of these have failed such as those employed in the period between 1950 and 1990 in India while some have done fairly well as in Scandinavian countries.

Whereas communism depends upon the state to provide goods and services, capitalism depends upon individual initiative to meet the same needs. Except for minor goods and services on a small scale that can be produced by an individual or an individual family most goods and services require that humans get together to create organizations for the purpose. Such organizations as legal entities are corporations and they are the main stay of a capitalistic economy.

It has been recognized that capitalism cannot function without regulation, for example preventing the development of monopolies that eliminate competition. If national economies have to continue with capitalism they must continuously evolve new practices, laws and regulations. It must be pointed out that whatever the economic model used, it is a tool to serve humans and wherever that purpose is defeated, resulting in inhumane consequences then economic activity degenerates into a tool for exploiting humans rather than serving them. While regulations control undesirable behavior of corporations, they also make life difficult for other corporations that may be behaving perfectly well. Thereby regulation also hampers economic activity. Therefore, in designing regulations care must be exercised towards simplicity and ease of application of the regulatory regime. In the present connected world, it is a wise course to study best practices of other countries and adapt these to suit one’s needs rather than inventing new practices that may turn out to be unsuccessful in the long run. However, this does not mean that new regulations need not be explored. Human innovation is an ongoing process just as human evolution is. It is with this in view that a new way of implementing corporate taxes is introduced briefly in this note. The simplicity of this new idea is such that it neither requires a lengthy explanation nor support by several other studies and references.

The new method termed Proportional Tax is simple to apply; in fact it is simpler than existing methods that have graduated discrete slabs. Aside from being a way to tax, the new proposal may also be used as powerful tool to discourage some of the worst practices of capitalism while encouraging the best ones. This new method was born out of a somewhat informal note by this author elsewhere called the ‘Rule of Ninety’ and it may also be referred with this latter name. It may be pointed out that the new proportional tax is specific for corporate taxes. Analogous methods do not apply to individual taxes.

Corporate taxes

Most countries impose corporate tax, also called corporation tax or company tax. Generally corporate taxes are charged as a percentage of net profits after allowing for certain deductions. Rates may vary between ten and fifty percent in most cases. While corporate taxes are an important source of revenue they are also used as policy measures, for example, exempting a certain industry such as the renewable industry from taxes or charging a graduated rate of tax to encourage new small businesses. However, existing methods of taxation are a limited tool in implementing policy. For example, they cannot prevent development of huge corporate monopolies on their own nor can they prevent excess profiteering. The new method called proportional tax can do all that existing methodologies of corporate taxation do, while doing much more to control corporate behavior in desirable directions in a straight forward and simple manner.

New Proportional Tax:

Proportional Tax implies that rate of corporate tax is proportional to net profits, NP, in a continuous manner rather than in discrete slabs. A constant of proportionality is required to determine the tax rate. Aside from the proportionality constant the new method may also prescribe a minimum threshold rate of corporate tax to prevent near zero rates of taxation for companies making small profits. It will be shown that this simple method has powerful mathematical properties that make it a powerful tool in the hands of policy makers and the public.


Rate of Corporate Tax = 100 (Net Profits/M)

The constant of proportionality, M, here is shown as an inverse constant in order to give it a physical meaning. M may be visualized as the net profit of a reference virtual mega corporation that has a very large profit, larger than the expected profit of any other corporations in the country. Thus if a company makes one fourth the amount of net profit as M then its corporate tax rate shall be 25 percent as per the given formula.


Figure 1 illustrates how corporate tax rates vary with net profits in billions of dollars. In this illustration, M has been selected as ten billion dollars. If a minimum threshold tax, T is selected as 20 percent and if M has been chosen at the outset as a suitably high number e.g. two and a half times the maximum net profit of any company, then tax rates for all companies in this example shall vary within a narrow band of twenty and forty percent. Different rates of tax can be promulgated depending upon choice of M and T. The variation of rates is a simple linear one but its ultimate effect on corporations is far from linear as shown next.

Proportional tax for corporations is different from proportional tax for individuals. While proportional tax for individual implies that they pay the same proportion of income as their tax, whatever is the level of income, for corporations it implies that they pay a tax at a rate that is proportional to their net profits.

Profits after Tax



Profit after Tax termed as P here as different from the net profit, NP before tax is

P = NP – NP (NP/M)

Figure 2 shows how residual profit after tax, P varies with net profit, NP, if M= 10 billion and T = 0. The unique feature of this variation is that beyond a certain level of net profits, residual profit of a company begins to fall and in extreme cases becomes negative. This very feature of the new proposal is a powerful controlling mechanism that may be used if a country wishes to reduce the size of certain corporations e.g. banks that might become too big to fail.

All companies would like to make the highest possible residual profits. However, they will be obliged not to charge such a high price for their products, even if they can, so that net profits increase beyond the point that their actual profit reduces or even results in a loss for the company.

Choice of constants M and T

Constants M and T can be chosen for the economy as a whole or they may chosen as different for different sectors of the economy. Thus if a country feels that a monopoly has developed in the automobile sector and other players need to be encouraged, it may set M as a value equal to the expected profit of the particular monopolistic automobile company. That company would then end up paying near hundred percent taxes while newer smaller players will be encouraged to develop with lower rates of taxes.

It must be noted that since tax rate depends on net profits, the single large automobile company can still keep new players out by bringing down its prices and reducing its net profit in order to maintain a high residual profit. But that is something that will benefit consumers. It is good corporate behavior in the interest of all. This type of monopoly needs to be encouraged rather than discouraged since it has become self regulated from within rather than from competition.


A new way of applying corporate taxes called proportional tax is described. An appropriate choice of parameters, M and T, is required in the new method of proportional tax, for different sectors of the economy or the economy as a whole. The new method appears to be a powerful tool to manage corporate behavior so as to bring out its best its best while discouraging practices that are detrimental to society at large. It merits further study by economists and policy makers in order to explore its full implications before implementing as a new corporate taxation method, if desired.


NP, Net Profit
P, Residual Net Profit profit after tax
M, An inverse constant of proportionality
T, Minimum threshold tax rate


1.Steven A. Bank (2011). Anglo-American Corporate Taxation: Tracing the Common Roots of Divergent Approaches. Cambridge University Press.

2. The Corporate Income Tax System: Overview and Options for Reform, Mark P. Keightley and Molly F. Sherlock (2014), CRS Report for Congress, Prepared for Members and Committees of Congress ( Report available as an online Pdf document)