yes! in various revisions in my mind of the foreign payouts tax idea, i’ve sometimes exempted equity and FDI because imbalances can resolve by revaluation on the balance sheets of parties knowingly willing and able to bear risk rather than disruptive default or revaluation of “safe” securities. 1/

in my current iteration, i think a foreign payouts tax should be universal (ie apply to equity and FDI), but countries that wish to encourage foreign investment in a meaningful, risk-bearing sense (as opposed to the “investment” of accepting paper for goods sold) can design particular carve-outs. 2/

the reasoning is that a blanket exception by category creates too urgent a game of whac-a-mole of foreigners hiding debt claims behind the “equity” of shell companies that hold debt. 3/

but if all foreign payouts are taxed by default (including capital gains), states can design particular, restrictive criteria for firms able to issue untaxed payouts to foreigners who will be meaningful risk-bearing investors, and understand macro adjustment risk as a risk they are bearing. /fin