Community contributions and taxes in free currencies

Different categories of taxes/contributions

We should build some expertise on this topic. So far the OECD has created a categorization that is synthesized in this wikipedia page.

• 5.1 Ad valorem
• 5.2 Capital gains tax
• 5.3 Consumption tax
• 5.4 Corporation tax
• 5.5 Environment Affecting Tax
• 5.6 Excises
• 5.7 Income tax
• 5.8 Inheritance tax
• 5.9 Poll tax
• 5.10 Property tax
• 5.11 Retirement tax
• 5.12 Sales tax
• 5.13 Tariffs
• 5.14 Toll
• 5.15 Transfer tax
• 5.16 Value Added Tax / Goods and Services Tax
• 5.17 Wealth (net worth) tax

This whole taxonomy applies for the conventional monetary system. 

What we want to explore here is:

• What are the existing taxes that could be relevant in the paradigm of free currencies, knowing that one type of tax may be accurate for one type of currency, and totally inadequate for another type?
• What are the new types of taxes -- or community contributions -- that are likely to emerge in the context of free currencies?

Here are some community contributions that don't seem to appear in the list above:

• A subscription contribution: this can be a unique entry fee (like the one promoted by Michael Linton in the LETS systems) or a cyclic subscription. The later seems very similar to the poll tax mentioned above.
• A volontary contribution: based on individual players' choice -- this hasn't been really explored yet and it is important not to make too early asumptions that it wouldn't work, or that only a minority of players would contribute.
• A multi-currency based contribution: as communities will work with currency sets, wealth will not just be expressed with tradable currencies (as this is the case today with conventional money). Acknowledging currencies such as TGB (True, Good, Beautiful), and measurement currencies (such as training credit used inside the community during the last year) can be used to calculate a tax set expressed in tradable currency.

Optimal tax theory

Free currencies are also going to be an opportunity for many to explore the optimal tax theory.

In the conventional monetary paradigm, taxes are described as a top down enforced obligation. Some argue that it doesn't respect individual freedom and that it legitimates legal violence and control on citizens.

In the next free currency paradigm, people will have the choice between many currencies and many tax systems. Some optimal tax (or community contribution) systems are likely to emerge, and attract many people. Not because the players pay less, but because the ratio between individual taxation and individual benefit will be the best. Individual benefit has not to be understood as selfish and materialistic: it can be a set of abstract values such as equality, human rights, nature protection, which are forms of acknowledgeable wealth.

Also current work on optimal tax theory assumes that tax payers have no direct control on where their taxes are going to be allocated. Legal authorities are in charge of this. In the next free currency paradigm, we consider that community contributors will be able to decide where and how they want to allocate their financial wealth. The holoptical structure will allow each individual player to see where the system is going, how community resources are allocated, and make corrections accordingly. Every player becomes a feedback loop for the whole system. This holoptical structure should strongly influence the whole dynamics of mutual support between individual and collective layers, hence provide dramatic shifts in tax theories.

Organic evolution of community contribution

The community contribution system is meant to evolve and complexify organically. We want to observe and learn what are the patterns that can emerge. For instance a new currency may begin very simply with a joining fee. Then it may evolve with a VAT, a wealth tax and an environment affecting tax.

Community contribution is going to be deeply embedded in currency design so that games can be infinite games. Infinite games can be infinite because players change the rule so that the game can go on.