Freeport-McMoRan (FCX)

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When one purchases a tax credit your buying the tax required on all major debt borrowed and paid back in the future.

So equity can be both debt and a credit. The share holders deficit is debt and the treasury stock is a credit issued by the government.

The credit can be used as collateral as well.

So let’s look at what the dam hell makes up the shareholders deficit.

When the tax credit is sold it is based on the minimal amount of tax required to be paid on the capital borrowed. We will say 25% for argument sake. If s company does better then that in sales with the capital borrowed then of course you will have a tax increase too as high maybe 50% of the net earnings.

The thirty percent was based on gross earnings minus costs plus paid in capital towards the tax credit, property tax’s and consumable product production tax’s.

I could break down the consumable product production tax’s but I will leave that up to the readers.

So the question is can the company sell the the share holders deficit by the issuing of additional equity to its already existing shareholders and buying it back at market value by forward splitting the shares. By doing this the equity deficit will increase increasing the credit owed if the company can purchase the tax debt below market value and sell it in the open market for a greater price benifitiing today’s shareholders by fracturing its shares by a share reverse split.


Fracturing shares is based on taking on share and making a half share out of it rolling the share back into one share again. This is a form of dilution to protect the interest of the already existing shareholders.

The derivative is the tax debt and credit. If wages goes up so does the consumerable tax paid in” paid in capital”. Retained earnings is the opposite of paid in Capital it is an additional tax debt ie: share holders deficit.

Share holders deficit is often referred to as good debt while paid in capital is bad credit and a source too adding to the recievables account that frightens the heck out of many investors due to the lack of control and costs often associated with recievables when credited to the public without collateral backing it.

A company is often better off using government tax credit as collateral for additional debt and receive royalty payments to offset interest payments on borrowed money.

Royalty payments are always paid by the issuing of additional treasury stock for the credit held.

Talk to your financial advisor and accountant before making any financial decision based on what is read here.