So, a restricted voting class can result in superior policy if the voting class is wiser than the general public. — Brendan Golledge

How do you quantify political wisdom? Do you have any evidence to back-up the idea that only giving, say, degree-holders the ability to vote on policy-changes results in a greater benefit for wider society?

Voting does not necessarily entail consenting. It doesn't have to. You can vote for a candidate or their policies whilst only supporting them in-part. What if you don't care about their policies on national security but have a vested interest in changes they say they'll make to the corporate tax structure? If you are willing to accept the risk that their national security policies, which you are uninformed on, may disbenefit you, because the prospective benefit, to you, of their corp. tax policy-changes are worth that risk, then in voting, you are knowingly acting in the capacity of a partially-informed person and assuming responsibility for any consequences resultant thereafter.
If 40% of the country is willing to accept such a risk, that something they don't understand may come back to bite them, because they appreciate the prospective benefits and believe them to be worth the risk, then who are these so-called 'politically wise people' to decide otherwise, based on a perceived superiority? You speak about power disparities between the state and the people, but entrusting decisions that effect the entirety of the voting-population to a group of people deemed politically intellectual is innately non-democratic and approaches oligarchal structure.
You also assume that all of these 'wise' people possess no personal biases and make informed decisions, never privy to logical error or emotional irrationality, solely to the benefit of the less-informed general population. Of course, this is unrealistic. Also, you talk about vote-rigging, but isolating a very particular group of highly-informed intellectuals and entrusting them to vote on the behalf of everyone else eliminates an essential facet of voting, in general. Votes are supposed to return the preferences of a wide cross-section of the people affected by the outcome of the vote. Barring people you think aren't smart enough to understand politics/economics is no different from barring certain races, women, or the disabled. It sets a precedent.

Have you ever read Animal Farm? It illustrates well how oligarchies, or by extension, systems approximating them lead to totalitarian control and the marginalisation of those you don't see as intelligent enough to have a say. It's food for thought.

~~~

As for your system in-general: It's a cool idea. You're operating under some pretty macabre precepts but I don't wholly disagree with you.

A problem with all systems of government is that whenever a person is given power over something, he can do whatever he wants with that power. — Brendan Golledge

Can he? Perhaps in unregulated tribes. In developed nations, though, we've recognised this vulnerability for millennia and worked to control it. Rome illustrates this well. In Republican Rome (pre-44 B.C.), there were two rulers instated by an electorate (the Centuriate Assembly), which, like your later idea, placed greater weight on certain types of people considered to better reflect the productive public interest (not the intellectuals, but the old and wealthy). These rulers, consuls, were largely kept in-line by the senate, which consisted of a few hundred people who, from 312 B.C. onwards, were sort-of popularly elected. In truth, they were appointed by censors who were themselves popularly elected, and so were trusted to reflect the desires of the citizenry in their appointments of senators. Also, censors could impeach senators at-will.
The senate held great influence over the consuls and had their own administrative power to some degree. In 44 B.C., the senate, unhappy with former-consul Gaius Julius Caesar's military actions, his ambition, and his self-asserted status as dictator in perpetuity, conspired to and succeeded in murdering him.
The fact is, there will always, in western civilisation, be a balance between a leader and their subjects, and when that leader becomes autocratic or establishes an undue oligarchy, that balance becomes highly volatile. In the years after Caesar's death, the Roman Empire was born and here we see the political landscape that arises from a position of absolute power being filled by a single man.
Apparently, from 27 B.C. to 476 A.D., 33 of 77 Roman Emperors were assassinated or executed. In contrast, very few (I cannot find an exact figure but it's certainly much smaller) consuls suffered either of these fates.
If you take a look at which emperors these were (perhaps Caligula is a prime specimen for such analysis), you'll notice that many of them behaved in ways that were borderline solipsistic and often rested on victimising everyone else.
It's never as black-and-white as: 'He has unchecked power, so he will abuse it with impunity'. That kind of power imbalance always tends towards a forceful balancing, whether by usurpation, assassination, a coup, an exodus, et cetera. So I don't feel that this is a problem that plagues governments with administratively-empowered, elected regulatory forces like the Roman senate. The UK monarch and prime minister each have a lot of power (in theory), but the genuine sway held by the voting public and their skepticism, and the suite of other politicians who constantly watch what they do prevents them from wielding said power carte-blanche and abusing it. The USA, too, again, in-theory. Even in countries under dictatorship, one can only act so obliquely against their populace's collective interests before that populace forcibly removes them from office.

So, this is an extreme assertion to base a whole new socio-economic system on. It's just too easy to negate in practice.

An example might be that citizens vote to fund a police force, but then the police extract protection money from all the local businesses in excess of what the citizens were intending to pay in taxes when they set up the police force. If you set up a higher government over the police to police the police, then what stops that higher government from doing something similar to what the police were doing? — Brendan Golledge

Police extortion is a very real problem. It's also illegal. It happens, sure, but it's not like the police are forcing money out of the populace who have no recourse, because their government, the ones allocating the taxes, are supposed to do something if their police force is systemically and invariably corrupt. I understand your point and agree on principle, but again, a real government, which is innately required to have an operating police-force and tax structure should abate this problem with regulation. Appoint new section chiefs, punish corruption, restructure, etc. I've never heard of an anarchical society with a police force.

Voting causes another set of problems, in that votes can be rigged, and voters can be ignorant. — Brendan Golledge

True, but this is assuming the worst again. Votes can be rigged, but that's why they are regulated, often both internally and externally. If one man, or a small group, are running a vote, then sure, they can manipulate it. But if hundreds of people across multiple organisations of different mild biases are running the vote, and have no contact with the candidates, it's unlikely it'll be rigged by said candidates. If you are talking about a totalitarian state headed by an autocrat, then yes, votes are often rigged, but that is in the absence of the regulatory bodies I've been talking about. So this, once again, is solved by an institution that predates Jesus.

But suppose that tax payers were able to vote for their own tax rates, and voting power was proportionate to taxes paid? And suppose the vote took place via crypto, so that the results of the vote could neither be rigged nor ignored? — Brendan Golledge

If I'm understanding right, you're saying that tax-payers should be able to vote on a, as you put it, 'consensus rate' which is then payed equally by everyone? I might be being slow, but, how does that avoid rigging? You say they can vote over crypto; if that meant everyone paying exactly what they felt they should pay, then, once the results are in, receiving either a bill or rebate commensurate to the amount they paid and the difference between that and the calculated average or 'consensus', then that would make sense to me, but surely without that, they still have to do a 'classic' vote for the consensus amount? Please do correct me if I've misinterpreted you.
In general, I don't know how you'd 'ignore' a non-crypto vote. What's the point in running a vote if you intend to ignore the outcome?

declare an "income wallet" and an "expense wallet" — Brendan Golledge

I feel our banks already do this with our non-crypto money. Isn't this basically a more awkward (you have to preempt future expenses) version of a retroactively-issued transaction report like the ones we receive monthly?

declare some items as tax deductible, such as items flagged with "groceries", "healthcare", or possibly "rent" — Brendan Golledge

So, the people vote for tax-rates, but the government decided what they get to pay less on? You can bet that 'rent' would not be a tax-deductible in this kind of state. Prices on everything, including houses, would be very high. In a world where everyone pays the same universal voted-upon tax-rate, poor people are extremely poor, because the combined upper and middle-classes have much more 'voting-power' than the working class. The middle and upper classes presumably have some societal awareness and want a balance between functional public infrastructure and low tax-rates. Low tax rates for them do not necessarily mean low-impact for the working class.

A business owner, in addition to his basic necessities, can pay for business expenses by his expense wallet. All his business income would come in through his income wallet. — Brendan Golledge

How does he pay his employees? Also, taxes cannot be the same for corporate entities as for individuals or you get massive inflation and a general disincentivisation for business activities. Business becomes untenable.

An investor, before he made an investment, would put the money he intended to deploy in his expense wallet. Then he'd buy his investments through the expense wallet. Whenever he took profits, he'd take them through the income wallet. — Brendan Golledge

Investing becomes a pointless and fruitless tedium if you start taxing every single capital gain. This also ties back to your meritocracy thing; wise people ought to hold more sway in policy votes. Most people do not care much for the stock market. A percentage do. Naturally, if these tax votes are entirely popular, policies affecting investors in-particular are going to be neglected in favour of more widespread, everyday activities. If you start levying a de-facto inverse VAT on stock sales, non-super-rich people will buy less stocks. This will negatively affect businesses. However, without traditional value-based capital-gains tax, the super-rich will be able to make more money than before profiting on extremely high-value stock sales, because if the rate happens to be lower than the existing CGT, you've effectively just given them a tax cut without need for a loophole.

if Steam sold a game which they flagged as entertainment, but the buyer tried to flag it as groceries to have it be tax deductible, then there would be a discontinuity which an automated system could easily pick up on. — Brendan Golledge

This would incentivise companies to categorise recreational products differently to avoid your voted-upon taxes. It's also a massive administrative cost incurred constantly to manage this system, and it's a big breach of privacy to have all of your purchases not only tracked, but logged. It also prompts questions about what is considered as tax deductible. Are condoms? What about pain-meds? Prescription meds? Non-essential groceries like sweet-treats?
Another thought: What if I buy tons of bread from the supermarket, all of which is tax-deductible, then sell it at a fixed, lower price externally? Will people compromise on present-wealth for the promise of a rebate at the end of the tax-season? Rational consumers, like the Homo Economicus, maybe. But most aren't, and most wouldn't. I would be raking it in legally. In fact, couldn't a person literally do this exact thing instead of a job in this kind of economy? They could monopolise groceries, sell at a short-term loss, and claim the reliable rebates at the end of the season. This is very bad for the economy.

If a citizen, for instance, loved the military, loved his local government, but hated the monarch and the state, he could vote for taxes for the military and his local government, but vote for a tax rate of 0% for the monarch and state. — Brendan Golledge

How could that actually be done, though? I have to vote for like 15 different specific departments? Also, like you said, this is a collective, 'consensus'-based tax, so even if I hate the monarch, I still have to pay him if I'm in the minority. Also, one govt. dept. kind of has to be responsible for actual money-allocation, right? What if we defund them? Then, there is no legislative body to proffer taxes to the others and the system stagnates.

If they stepped out of line, either they would be punished by higher branches of government, or defunded by the public. — Brendan Golledge

If there is an administrative body that sits hierarchically above them that can punish them for stepping 'out of line' by that body's own standards, then they are by definition not autonomous.

There could also be a problem that some actors could vote for a billion percent tax rate in order to skew the average. I have thought of two solutions to this problem:

Have a maximum allowable tax rate for any government agency (maybe like 3-5% sounds reasonable to me).

Anyone who votes for a tax rate more than 1 standard deviation above the mean would have to personally pay whatever tax rate they voted for, whereas everybody else just pays the average. — Brendan Golledge

This is good. I think 1 s.d. above the mean is a little mean though. Doesn't it break the collective consensus system too, if some people are punished for not conforming to the status quo? Isn't that the whole point of the system, to avoid people having to pay more than others based on what they voted for?


~ ~ ~

This is good stuff, and you've articulated it well and clearly put a massive amount of thought into it. It's very interesting. Please do know that, although it's hard to convey tone over a forum, I'm not trying to rip on your idea whatsoever; I'm just giving my thoughts and critiques. I'm happy to be corrected or enlightened if something I've said is wrong. Keep it up, it's a cool system.

—S

This user has been deleted and all their posts removed.

I can see you have put a lot of work into the certain policies. However none of it will work if the premise is flawed. What you are suggesting is a society in which the people with the money decide the laws.
This is based on the votes being based on the total amount of money paid, but if it were based on the number of people that is no different from just one vote per person.
A majority of the wealth is in the middle class, but only just behind them is the top 1%. In the society you suggest the poor people would get almost no vote. Additionally, the rich people would decide the laws, which is not much different from an oligarchy.
This is not to say that money shows no results in our current politics, just that it is not as upfront and directly efficient (if you know what I mean).
Though I do like that people would actually pay their taxes this way.

This user has been deleted and all their posts removed.

I apologize for my mistake.
I was thinking on a chart that I saw for global wealth distribution (Which still must have been false).
Also, thank you for the video, it was interesting.
However, it only proves my point even more. If votes were based on the amount of taxes paid, the power would be in the hands of the extremely rich.

Thanks for taking my idea seriously and writing such a long reply.

How do you quantify political wisdom? Do you have any evidence to back-up the idea that only giving, say, degree-holders the ability to vote on policy-changes results in a greater benefit for wider society? — Stuart Roberts

You said more that I'm replying to, but I'll just quote that for now.

If the ruling class is defined by something else, like race, or heritage, or profession, or education, etc, then it's somewhat arbitrary, and a human being is deciding which traits are important and which aren't. However, my idea is that voting power is proportionate to taxes paid. There is no restriction on how that money was acquired, or who can pay taxes. This is superior, because it means that ANYONE can join the ruling class. It is also superior because those paying taxes are supporting the state. It seems fair to me that those with skin in the game should have a say in what is done.

I do not think that those who pay no taxes should be allowed to have a say in government. Then you get parasites voting for their neighbors money.

It is somewhat misleading to call the tax payers in this system the "ruling class", however, because literally their only political right would be to set the tax rate. It is a very powerful right, because they can directly defund government departments that they don't like.

Unless the society is already very unjust, then being able to make money is a good sign of competence. So, I think I am justified in saying that those who pay more taxes on average will be wiser than those who don't.

Also, nobody believed in universal suffrage historically until very recently. So, dissing the idea for being undemocratic from the point of view of universal suffrage is not a very big criticism for someone who is historically-minded.

You had some criticisms about me taking an extreme worst-case view in many cases. I don't believe that the worst-case happens every time, but you have to plan for it when building something that is meant to last. If I were to try to implement a government, then I would want it to be able to withstand repeated evil and coordinated attacks from all directions.

If I'm understanding right, you're saying that tax-payers should be able to vote on a, as you put it, 'consensus rate' which is then payed equally by everyone? I might be being slow, but, how does that avoid rigging? — Stuart Roberts

I think some of the rest of what you said comes from ignorance of how crypto works. When smart contracts are written, they are implemented automatically without further human input, so long as the fee is paid. You can't stop a smart contract without shutting down the whole network.

There are some chains, like ADA and ICP that I mentioned, that already have local governance working right now. When a policy is voted on, if it gets the required number of votes, it is automatically and immediately implemented by the network.

Also, crypto in general can't be hacked, which is why it is a thing.

The idea is that if people declared their wallets honestly, then the tax would be AUTOMATICALLY collected every time someone made a transaction (or maybe like once a year, depending on how they wanted to set it up). No need to file taxes.

Also, the tax rate voted upon would work the exact same as current chain governance. It is a simple thing for a chain to add up all the funds sent to certain wallets (taxes paid in this case). Then it would automatically grant proportionate voting power to the tax payers. When the tax payers voted (maybe there'd be a vote once a year?) then the new tax rates would be automatically applied.

For some things, a person may want his real identity to be tied to his crypto wallet, like if he owns property, because the government is what secures property rights. However, this wouldn't be mandatory in all cases. The system could be set-up so that it just doesn't care who pays taxes, it just gives voting power to whoever has paid. Then it could be possible to vote and pay taxes without the government knowing who you are.

I think it would be good to make voting anonymous, so that people could not be bullied. There is such a thing as "Zero Knowledge Proof", so, it could be possible to collect the votes without anyone knowing who voted which way.

In general, I don't know how you'd 'ignore' a non-crypto vote. What's the point in running a vote if you intend to ignore the outcome? — Stuart Roberts

Suppose a president has a vote, and the results come in and say that his opponent won. He says, "F you; I'm the dictator now." If the army supports him, what are the people supposed to do short of starting a civil war? But most of the time, the "president" rigs the vote to show that he is more popular than he really is.

If an automated system collects both the taxes and the votes, and the votes set the tax rate, then no one would be able to subvert the result. The dictator would have to just ignore the results and extract the taxes by force, which would be hard to do if the people had previously agreed that such behavior was illegitimate. They'd have to go door-to-door and rob people one at a time. But they wouldn't even know how much they should be able to get from each individual person if people kept most of their money in anonymous hard wallets.

So, the people vote for tax-rates, but the government decided what they get to pay less on? You can bet that 'rent' would not be a tax-deductible in this kind of state. Prices on everything, including houses, would be very high. — Stuart Roberts

Tax deductible items could be voted on through the already existing tax system. The system would work with or without tax deductible items though. Anyone in government could call a vote for a change in tax policy, but it wouldn't go through without a majority of the voting power.

Investing becomes a pointless and fruitless tedium if you start taxing every single capital gain. — Stuart Roberts

Doesn't the government already do this? You are supposed to fully account for all capital gains when you file your taxes.

This would incentivise companies to categorise recreational products differently to avoid your voted-upon taxes. It's also a massive administrative cost incurred constantly to manage this system, and it's a big breach of privacy to have all of your purchases not only tracked, but logged. It also prompts questions about what is considered as tax deductible. Are condoms? What about pain-meds? Prescription meds? Non-essential groceries like sweet-treats? — Stuart Roberts

It is true that people would be able to cheat in this system, mostly by lying about how they used their income and expense wallets. But the tax system is already complicated and it's already possible to cheat. How would having an automated system with a public record of all transactions make it harder to catch cheaters? I would think having a simple tax code as described plus an automated system that tracks all exchanges would make it easier to catch cheaters.

I don't think large businesses would lie in order to avoid taxes. Businesses already don't label cigarettes as sweets in order to avoid regulations. They'd get in big trouble if any of their numerous customers ratted them out. But with this system, if even one customer flagged the transaction as something different than the business did (even if they were unaware that the business was trying to cheat), the government would be automatically notified and then a human would investigate.

Invasion of privacy is a legit concern. For tracking physical property, tracking personal identity and individual transactions would be necessary. But it is possible to do crypto transactions without linking your real identity to your wallet, so, although there'd be records of everything, the government wouldn't necessarily always know who was doing it. I think the issue of privacy would be worth investigating further, since this much info would make it easier to run a police state.

How could that actually be done, though? I have to vote for like 15 different specific departments? Also, like you said, this is a collective, 'consensus'-based tax, so even if I hate the monarch, I still have to pay him if I'm in the minority. Also, one govt. dept. kind of has to be responsible for actual money-allocation, right? What if we defund them? Then, there is no legislative body to proffer taxes to the others and the system stagnates. — Stuart Roberts

I am a small-government person, so I like the idea that having many government departments would be annoying for tax payers, so that they could vote to defund ones that they didn't understand or which taxed too much. Although if you were voting digitally, it might actually be possible to vote for 15 departments in 10 minutes (although informing one's self on what the tax rate ought to be would obviously take longer).

Yes, you'd still have to pay the monarch if you were in a minority that didn't like him. This is still an improvement over how taxes usually work. In this system, theoretically, 50% of the taxes paid are voluntary. As things are now, in theory, as low as 0% could be voluntary.

Again, because the vote and taxes would be collected by crypto, it would be possible to directly tax each and every transaction and send the taxes to the relevant government department automatically. The IRS would be largely automated, so that there would be no purpose for tax agents, apart from trying to catch fraud. In cases where people declare and use their wallets honestly, then no human involvement in tax collection is necessary.

It would be a problem if the voters voted to defund necessary government services. Maybe if they defunded the police, then suddenly there'd be crime everywhere and businesses would close down. But in that case, the tax payers did it to themselves.

You said something somewhere that like 1% of the people in the USA have most of the wealth. I believe that a large part of the reason this happens is because we have dishonest money. The government and banks can pull money out of nothing. Many of the richest people in the world now got rich by playing games with money, and they never provided real value to another person. Even those who have real businesses, like Bezos and Musk, are much richer than they otherwise would be because money printing inflates the value of their stocks. If we used only one or a small number of cryptos for money, then we would have a deflationary currency, and no one would be able to print. The only way to get more money in this case would be to provide something to another person who was willing to pay you for it.