The idea here would be to have a variable corporate income tax rate based on industry requirements of government resources. In order to avoid unpredictability in the economy, funding levels for regulatory agencies would be locked in for a multi-year period.

For example, the EPA or USDA would have its regulatory offices' budgets locked in for say 5 years. When the next budget cycle came around, the agency would assess compliance rates in determining allocation of resources for the next 5 years. Industries that had very high compliance would likely see a reduction in the proportion of staff dedicated to monitoring their activities, whereas industries that had low levels of compliance would see an increase. Then the rates at which each industry was taxed would be adjusted based on their proportionate demands on those government resources. The absolute revenues from CIT would not change, but a self-regulating industry would pay less than an industry that regularly produced health and safety standards violations.

This theory would not necessarily have to be applied on an all or nothing basis, assuming that the total revenues from CIT would significantly exceed the costs of all the regulatory agencies involved. It is possible that the potential fluctuation might be less than 1%, but even a small percentage reduction in CIT would be a meaningful incentive to promote higher levels of compliance with government regulations, which theoretically could allow the government to reduce its footprint over time due to the higher level of self-policing.