Ever since that Kosmos spacecraft t-boned an Iridium spacecraft a few years back, more and more people have been paying attention to the space debris issue. We’ve been able to live with the nuisance caused by space debris for a long time, but space debris, especially in LEO, is one of those things standing in the way of us having really nice things. You want to do something that involves a lot of cross-sectional area (a 4000 satellite LEO constellation, large depots, LEO colonies like what Al Globus has been promoting, power beaming satellites for powering aircraft or microwave thermal launch vehicles, or LEO commsats with enough power and antenna gain to provide satellite-based roaming for cellphones), and all of the sudden the nuisance starts becoming a real pain in the neck or even deal-killer from a collision probability standpoint.
The problem is that while there is no shortage of good ideas for cleaning up space debris1, what has been lacking is a way of monetizing debris cleanup. Without some way to make a profit, companies won’t generally invest resources, and you generally can’t get external investment either. Now, government created most of this mess with launches for military or civilian space exploration missions, so they should be a big part of the solution, but finding ways to make space debris cleanup profitable is important (and preferably in a way that isn’t 100% tied to traditional government funding as the government is a notoriously undependable customer). But initially, even directly government funded efforts would be a huge improvement over what we have now. The challenge has always been finding ways to convince governments to cough up the money for cleaning up their mess.
Here’s my really crazy not-even-half-baked idea:
There are a lot of US corporations that make profits overseas and don’t repatriate them due to the high US corporate tax rate. In some cases these are profits that legitimately came from servicing overseas customers with overseas service centers and factories, and in some cases it looks more like clever tax avoidance schemes. While the sane thing to do would be to lower our corporate tax rate to be more in line with the rest of the developed world, that’s an idea that’s been talked about for a long time without any action.
What if the government agreed to a mechanism for allowing companies to repatriate foreign profits at a discounted corporate tax rate in exchange for donations to a fund for debris cleanup prizes/bounties for US-launched space junk? Say for every $1 a corporation donates to that debris removal bounty fund, they’re allowed to repatriate $X at a corporate tax rate quite a bit lower than the 35% they’d normally pay (say 15%). You could tweak the value X to make sure that it’s economically better for the companies to repatriate than to stay overseas (effectively varying X you can make it as though the repatriation tax rate is somewhere between 15 and 35%). For instance, if X were $5, that would be the equivalence of a tax rate of 29.2%2, at X=$10, the effective tax rate is 22.7%, and the breakeven value of X where it doesn’t save any money to use this method over repatriating at the existing 35% corporate tax rate is X=3.25.
There are several advantages I see to this approach:
- This is revenue the federal government wouldn’t have gotten anyway without something like this, so this is actually revenue positive for the US government.
- The repatriated profits minus tax and donation is more money being invested into the US economy.
- The donation money provides a mechanism for filling the coffers on a bounty system for deorbiting US launched space debris (something like 1/4 of the junk up there) that I don’t think would be tied to the normal appropriation process, since the donation money goes into the fund before any money enters the tax system.
While on the surface this might appear to be very similar to lowering the corporate tax rate to be more competitive, and then using some of the increased tax revenues to fund a program like this, the key benefit is that the money from this donation isn’t appropriated tax revenue, so that may change dramatically how stable it is compared to say a normally-funded program at NASA or DoD. Because this isn’t collecting a tax and then appropriating money for a program though, they could probably setup this program to run for a longer duration that isn’t tied directly to the annual appropriations process. Maybe initially provide a 10yr duration, with the option for renewal, where the money goes into a bounty/prize fund for demonstrated removal of specifically designated US-launched space debris (and the debris of friendly countries willing to approve their debris for removal).
A couple of potential nuances you could add if desired:
- You could limit eligibility of using this specific mechanism to profits made by aviation and aerospace companies overseas, and use similar mechanisms for other industries to funnel donations to other prize funds more directly tied to the interests of those industries (like say a fund for safe, low-cost nuclear power funded by repatriated oil profits, a fund for low-cost desalination provided by repatriated foreign agricultural profits, etc).
- If you’re worried about too many people taking this route, or it encouraging companies to move operations overseas to take advantage of the slightly lower effective tax rate, you could set a first-come-first-served yearly cap on the amount that is eligible for this approach, like say $5-10B or something. Or you could set a yearly cap per company (say $100M or $500M or something).
- You could have the fund either be directly government run, or run by a non-profit with strict requirements that some minimum percent (say 90%) has to be set aside for prizes themselves.
As I said, totally half-baked, and not at all meant to compete with more traditional appropriations-funded approaches like say COTS-like funding, or gov’t funded tech demos, or even gov’t funded debris removal missions, or more government-free options like someone finding a way to make a profit off of satellite recycling. But I wanted to throw this out as a potentially creative mechanism for getting funding donated for an important cause.