>Or, instead of lowering the amount taxed, they could use those assets to fund a sovereign wealth fund for government benefits. Both options are equally easy f

>Or, instead of lowering the amount taxed, they could use those assets to fund a sovereign wealth fund for government benefits. Both options are equally easy for the state to do, of course. The point is there's a sound argument for doing the fund when you have such a large asset that's otherwise useless to you, instead of returning the money as lower taxes. If you do the fund you're setting up your economy to be able to depend on the revenues from the fund forever as you are not depleting the capital. If you lower taxes you get an economy using asset sales to fund current expenses. Once those assets run out you get to deal with that somehow to go back to a balanced budget. Since most states tax incomes much more than wealth doing that would basically mean the current generation living large and passing on the problem to their children to solve. Which is effectively what is happening in a lot of the oil rich countries.