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.