Taxes in the digicash world

[Robert Hettinga]

At 11:47 AM -0400 7/30/96, Sandy Sandfort wrote:
> If I were the government, I'd tax realty as my primary or only
> source of income.  It *appears* "progressive" so it appeals to
> the lower class, but it is passed along to everyone in the form
> of higher commodity prices and rents.  Realty can't be picked up
> and moved to another jurisdiction like personal property or
> people, so it is easier to hold as a tax hostage by government.

Sometimes, in my wilder moments, I think about it this way: Agriculture
created cities, where the "government", actually large landowners, relied
on implicitly forcible payments-in-kind of agricultural produce.
Industrialism (Maybe. Maybe printing did.) created nation states, which
rely on forcibly obtained taxes on cash-flow and financial assets. Maybe,
in a financial cryptography -enabled geodesic economy, cashflow and
financial asset taxation become impossible as a revenue source for anything
but the propigation and/or regulation (probably private) of cashflows and
financial assets themselves ;-).

The phrase "Government services" becomes exposed for the oxymoron that it
really is under this scenario. There'll be no way to compel payment for
these "services", so they'll be forced to prove their usefulness in a
market of some kind. They'll have to earn their money the old fashioned
way.

I expect that large economic entities may exist, the way cities and
nation-states do, but they won't be geographic in nature, because location
ceases to be as economically important as it is in agriculturalism, where
land is the source of all wealth, or as it is in industrialism, where
actual physical positions in distribution and information heirarchies are
so important. (The three laws of retail, and all that...)  It's even hard
for me to see large permanent entities as salient features of such an
economy. That is, each entity will be more like an ad-hoc partnership of
other smaller entities, which goes away after its specific financial
purpose has been completed. We're experimenting with those "virtual"
organizations now, and the word "syndicate" will probably reemerge as the
dominant way of doing larger business projects. The financial and
entertainment markets work this way a lot, and, even though large
corporations exist in those markets, lately there's been a proliferation of
smaller and smaller firms as information technology enables their creation.

Permanence is a function of physical reality, and information, because it's
not physical, is not permanent. It is always in the process of becoming
something else.

So, real estate taxes may be the only thing left, but they might be used
for really trivial stuff, like very local roads, infrastructure (dark fiber
maintenance? :-)), etc., and not much else. Kind of like local irragation
committees in third world countries (or New Mexico ;-)) devolved from the
water-monopoly "states" of places like ancient Mesopotamia, Egypt or China.

Cheers,
Bob Hettinga



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Robert Hettinga (rah at shipwright.com)
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