Dear President Joe Biden,
I am writing on behalf of Valles Capital Inc., an open-end, non-diversified, management investment company, to request the Biden Administration issue a 10-month Treasury Note for a contribution of up to $200 million (face value). This action would affirm the Administration's commitment to upholding the Sherman Act by mitigating price fixing and market power over the Fund’s objectives on behalf of American citizens. The American people eagerly await the Administration's approval of this initiative and any required action on their behalf. This is NOT a tax loophole. Immediate action is required before reforming the tax on unrealized gains occurs, thus ensuring that every American can fully benefit from this existing rule.
The 10-month Treasury Note is crucial for ensuring liquidity for our business strategy to create a brokerage debit card with multiple share classes that sequentially unlock (see Valles Capital Inc Form N1A-A Item 11 EDGAR database). This strategy incorporates self-directed brokerage accounts with Visa/Mastercard access, broadening public availability, building accounts, providing instant liquidity for Fund shares and yearend tax benefits on income for daily users.
Issuing this Treasury Note and establishing an account with DTCC with ticker symbol VCIXX and CUSIP will facilitate the exchange of Valles Capital Inc. Infinity Class shares to the U.S. Treasury. The 10-month Treasury Note authorizes DTCC to issue 4-week ladders using the ticker symbol and CUSIP on a first-come, first-serve basis among U.S. financial institutions (market makers). Alternatively, the Administration could allow DTCC to exchange shares at the $1 NAV, passing the equity increase to market makers (MM), remunerating the Treasury for the T-Note award contribution, with Valles Capital Inc. receiving the T-Note award at maturity. This approach creates value with minimal risk for the Administration, market makers and the Treasury while creating exits and aiding the Fund’s market introduction and stabilization.
DTCC will reinvest 5% of market maker (MM) exit proceeds, generating a temporary 25% return on weekly asset turnover events. This return will gradually decrease as indirect participant contributions increase (see Form N1A-A). Shares are exchanged in 4-week ladders, each consisting of 2.5 million shares, with only 80 ladders available. A minimum industry investment of $10 million limits participation to 20 MMs. Based on the T-Note face value, MMs exchanging shares with an annual market value of $1 billion will yield a return of $13 billion.
Assumptions:
Step-by-Step Calculation:
Summary:
The annual return on a 5% reinvestment of $1 billion exit proceeds each week, with a 5:1 investment multiple, is $13 billion.
Issuing the T-Note is projected to generate $260 million in fund management fees within the first year, helping to establish a stable market for the Fund’s shares. This revenue will be reinvested in the Fund, increasing the value of Valles Capital Inc.'s 1 billion shares of capital stock to $1.3 billion, or $1.30 per share. However, after accounting for $20 million in CEO compensation during the first year, the market value of each share will be adjusted to $1.27.
Assumptions:
Step-by-Step Calculation:
Summary:
A weekly 0.5% fund management fee reinvested in a 5:1 investment would yield an annual return of $1.3 billion.
If a person earns $750 per week (earning $18.75 per hr. x 40 hrs. per week) and is earning at a 2:1 return investing in Admiral Infinity Class shares (meaning for every dollar invested, they earn two dollars), we can calculate the time it would take to save $5,000 under the assumption that all earnings from the investment are saved and that the person spends $750 per week.
Breakdown:
- Weekly earnings: $750
- Weekly spending: $750
- Investment return: 2:1
Since the person spends all their weekly earnings, the $750 would go into the investment account to generate returns.
Investment Return:
- Weekly investment: $750
- Return on investment: $750 * 2 = $1,500
Each week, the person gains $1,500 from the investment. Since they spend $750 weekly, the net gain would be:
- Weekly net savings: $1,500 (return) - $750 (spent) = $750
Time to Save $5,000
To save $5,000:
Time = $5,000 ÷ $750 (weekly net savings) = approx. 6.67 weeks. So, it would take approximately 7 weeks to save $5,000 to unlock Sovereign Infinity class shares.
Tax Implications of COGS:
1. Weekly Income: $750
2. COGS (Weekly Investment): $750
Impact on Taxes:
• If the $750 invested each week is considered a deductible expense (similar to COGS in a business), it would reduce the taxable income.
• The person’s taxable income could be significantly reduced or even eliminated depending on the country’s tax rules and how the expenses are reported on tax returns.
Example:
• Gross Income: $750 per week
• Deductible Expenses from investing (COGS): $750 per week
• Net Taxable Income: $0 per week (if the entire $750 is deductible)
In this case, since the person’s weekly income is fully offset by deductible expenses, their taxable income could be zero, meaning they might not owe any income tax on the $750 earned weekly.
Conclusion:
The COGS or weekly investing indirectly reduces taxable income, which can lower or eliminate the tax liability on the $750 weekly income. However, it’s important to note that this depends on a country’s tax laws, and the individual’s expenses must be qualified as deductible on income tax returns.
Short-Term and Long-Term Capital Gains Taxes: An Overview
Capital gains taxes are taxes levied on the profit made from selling an asset above the COGS deduction, such as stocks, bonds, real estate, or other investments. The amount of tax you pay depends on how long you hold the asset before selling it, which categorizes the gain as either short-term or long-term.
1. Short-Term Capital Gains Tax
Definition:
Tax Rate:
Example:
2. Long-Term Capital Gains Tax
Definition:
Tax Rate:
Example:
Key Differences
Planning Considerations
Understanding the difference between short-term and long-term capital gains taxes is crucial for effective financial planning, as it can significantly impact your after-tax returns on investments.
Once the importance of this initiative is recognized and the decision to move forward is made, it is customary for a payroll advance (typically $80K) be made to initiate the equitable transition of CEO Angel Michel Valles for performing the roles of Fund Manager and Fund Overseeing Officer.
Please feel free to visit www.VallesCapital.com for more information.
Best regards,
Angel Michel Valles
CEO, Fund Overseeing Officer
Valles Capital Inc.
928-233-1345
