The Mirrored-Interest Rule
A Single Constitutional Change That Eliminates Income Taxes, Sovereign Debt, and Central-Bank Rate-Setting Overnight
Executive Summary
Implement one new banking regulation (four sentences long) and you can permanently:
- Abolish personal and corporate income taxes
- Abolish VAT and sales taxes
- Eliminate all government borrowing and sovereign debt
- End central-bank interest-rate manipulation
- Fund world-class infrastructure in cash, every year, forever
- Automatically prevent reckless lending and credit bubbles
No new institutions. No new taxes. No magic.
The Rule (exact wording you can copy-paste into law tomorrow)
“Every licensed bank shall, simultaneously with the recognition of interest income on any loan or credit facility, recognise an identical liability payable to the relevant public authority. The bank shall remit the exact amount of interest received from the borrower to the public authority within the same reporting period. In the event of borrower default on interest, the bank shall remain fully liable for the mirrored payment from its own capital. This rule shall apply to all interest, fees treated as interest, and implicit interest in any financing product.”
How the Mechanism Works (four steps, zero friction)
- Bank issues a loan → creates money exactly as it does today.
- Bank earns $100 of interest → books $100 interest income (normal).
- At the exact same moment, the rule forces the bank to book a $100 liability to the Treasury/Regional Fund.
- When the borrower pays the $100, the bank forwards the identical $100 to the public fund → net interest profit to the bank = $0.
If the borrower defaults → bank still owes the $100 to the public fund and must pay it from equity → default penalty is automatically doubled.
What This Single Rule Replaces
| Current Tool | Replaced By | Permanent Effect |
| Income, corporate, and sales taxes | Mirrored interest stream | 100 % of citizens and companies keep their earnings |
| Government bonds & debt | Cash from mirrored interest | Sovereign debt → 0 % forever |
| Central-bank policy rates | Pure market competition | Rates set only by risk and demand |
| Reserve requirements & QE | Automatic demand-driven money supply | No printing, no destruction |
| Credit bubbles & bank bailouts | Built-in double-penalty on defaults | Banks police themselves or die |
Projected Global-Scale Numbers (using 2028 averages)
| Metric | Current World | With Full Mirrored-Interest Adoption |
| Total global private credit | ~$280 trillion | unchanged |
| Annual interest paid to banks | ~$12–15 trillion | unchanged |
| Annual revenue to public funds | $0 | $12–15 trillion |
| Global government debt | ~$100 trillion | → $0 within 10–15 years |
| Average personal income-tax rate | 25–45 % | → 0 % |
$12–15 trillion per year is roughly triple current global infrastructure spending and five times all military budgets combined.
Why Banks Will Quietly Accept It
- Their profit from interest becomes zero, but their profit from the spread on the principal (the real business of banking) remains untouched.
- They still operate in a zero-tax jurisdiction for every other activity.
- Default risk is now so expensive that loan quality skyrockets → lower provisions, higher capital ratios, higher share prices.
- The rule is perfectly transparent and automatic → no lobbying, no loopholes, no political risk.
Implementation Path (18–36 months)
Month 1–6 Constitutional or legislative adoption
Month 7–12 Accounting system update (four new general-ledger lines)
Month 13–18 Phased rollout (start with new loans, grandfather existing)
Year 2 Full application → first trillion in cash hits public funds
Conclusion
The Mirrored-Interest Rule can be used to fund 460 km/h maglevs, 24/7 metros, and new airports every year — all in cash — while citizens pay zero direct tax.
It requires no new money, no new agencies, and no political courage beyond copying four sentences into law.
It turns the interest portion of private credit — currently the largest private profit pool on Earth — into the largest public investment pool on Earth, automatically and forever.
Adopt it, and within one political cycle your country will run budget surpluses measured in trillions, owe no debt, tax no citizen, and never again ask a central banker what the interest rate should be.
The mirror is ready. All that is required is to hang it on the wall.
Respectfully submitted for immediate global consideration.
For collaboration in macroeconomic investment opportunities, please email info@sinozeit.com