Autonomous Government + Voluntary Taxation

Autonomous Government + Voluntary Taxation

Since I am so displeased with democracy as it exists in the USA, I’ve been thinking about an alternative kind of government. Here it is.


Autonomous Branches of Government

One of the reasons I don’t like democracy is that lots of people who don’t know anything are meddling in other people’s business. So, I thought it would be nice if each branch of government oversaw itself. The military would decide how the military was run, the local police would decide how they were run, the local courts would decide how they were run, etc. This has a secondary benefit of accountability, which will be discussed in the tax section.


The Sovereign

The sovereign would combine the mostly independent branches of government into one functioning whole. He would decide which branches of government existed, settle disputes between different branches of governments, define internal borders, do international diplomacy, declare war, etc.

There could be a feudal system, where there could be a king at the top, with a duke (equivalent to a governor) for each state, and a count (equivalent to a mayor) for each county. Each local government could run things as they saw fit within their own borders.

Alternatively, perhaps the emperor would be obligated to choose a successor unrelated by blood ties. This would have the benefit of decreasing the likelihood of there being an incompetent king.

For this thought experiment, I’m not considering the possibility of voting on rulers, since the USA is setting such a poor example right now, and because this would be contrary to the principle outlined here of autonomous government.


Voluntary Taxation

I’m imagining a future where crypto is used by default to pay for most things. I would personally like ICP for this purpose, because it’s fast, you can access the block chain from a web browser, you can access your internet identity with the biometrics on a phone or laptop, among other reasons. I think there should be user-friendly dapps to help you pay for things with your phone (like scan a barcode & give your phone your fingerprint to make a payment, with warnings for large or unusual payments), to help with inheritance, taxes, and other things.

Crypto blockchains prefer to be independent, but with this style of government, the government would be using a blockchain to collect taxes. One solution could be to create something like a “ICPUSA” coin, which one can acquire by exchanging it for 1 ICP, which is the standard currency in the USA. The advantage of doing this would be that there would be tax infrastructure built around this coin (on the ICP blockchain), so that using it would automatically get your taxes calculated and collected for you. Using other currencies could perhaps be permitted, but more paperwork would be required in order to pay the tax.

Once a year, each taxpayer votes on the tax rate for each independent government agency. Voting power is proportional to taxes paid during the previous voting year. Whatever the weighted average tax rate is among the voters, that tax rate is automatically applied and deducted from people’s wallets. Taxpayers could also vote for changes to tax policy. There would have to be special rules to prevent abuse, like a maximum tax rate that can be voted on (maybe 10%), to stop someone from voting for a bazillion percent tax in order to skew the average. A wallet might need to be approved by a government agent (like the king, a duke, or a count) before it can ask people to vote on it, or else a large private company like Walmart might be able to unilaterally vote itself a tax rate of something like 0.0001%.

ALL taxes would work the exact same. Each entity (person or corporation) would declare an income wallet (where one receives income) and an expenses wallet (with which one pays for expenses). The tax dapp would automatically track all transactions that entered the income wallet, and all transactions that left the expense wallet. The tax would be automatically applied to the difference between the income and the expenses. Employees might have no need for an expense wallet, but both businesses and investors would use the expense wallet to keep track of money they spent on trying to make more money. The tax would be applied to ALL transactions: groceries, land sales, income, capital gains, etc. For this reason, the tax rates should be very low, because they will add up very quickly (a farmer selling to factory which sells to a wholesaler which sells to a retailer who sells to the consumer would rack up 4 taxable transactions).

The government and taxpayers (by voting) may decide to allow people to flag transactions with things like, “inheritance”, “food”, “medical expenses” or other such things in order to reduce or eliminate the tax. Or maybe people could count food and medical expenses as “expenses” and thus these would be tax deductible. Or maybe some things like "alcohol and drugs" would get a higher tax rate (maybe like 2x of whatever the normal tax rate was). The tax payers could vote to choose, perhaps with oversight from the government.

There would of course need to be occasional audits in order to ensure that people were honestly declaring their taxes.

Maybe in order to encourage people to vote, there could be a higher tax rate for people who didn’t vote. Or maybe nonvoters would simply not be counted.


Example:

A typical taxpayer would probably vote on tax rates (in percent) for the following:

Local police
Local emergency personnel (firefighters and ambulance)
Local courts
Local count + miscellaneous local expenses
Local duke + miscellaneous state expenses
State court system
The national military
The king’s personal expenses + miscellaneous government expenses (maybe king’s security, secret police, espionage, etc)

I would guess that the tax rate for most of these things should be less than 1%.


Benefits of this system:

Everybody would be in their own lane. People wouldn’t be able to vote on stuff which they did not understand.
At least 50% of taxes paid would be voluntary (or else the taxpayers would vote on a lower tax rate). So, it would be impossible to vote for your neighbors money (welfare).
Tax payers would be able to directly defund certain government agencies which they disapproved of. Because the vote took place via crypto, it would be automatically implemented and thus could not be cheated or ignored.
Each branch of government would be forced to continually justify its existence, hopefully by doing useful things. Maybe it would be useful to have one or more state propaganda channels for the purpose of convincing people to vote for higher tax rates.
Assuming that the society was at least semi-meritocratic, those who were more competent would have more voting power.
The issuance of currency would be outside of government control, so inflation would not occur.


Disadvantages:
The citizens would have to voluntarily pay a tax. If they decided that they didn’t want to pay any tax at all, even for legitimate government services, then there would be problems.
Voters would have to pay attention generally to punish abuse.
If some government agency found a significant source of income outside of this tax system, then it would be difficult for tax payers to punish that agency.