Two predictions. The IRS and state tax systems will use SAFE or a system very much like it. Taxation will go more tangible, like whack-a-mole if it pops out of the virtual it will be taxed. But there will be bobbing for apples into the virtual as well, and a SAFE type system will end up making both of those functions more reliable and verifiable.
For some Tax is a pure evil, but I think there may be a more nuanced way of looking at this so that there is less resistance from the public sector to crypto. I’d like to see more openness to un-pegged straight fiat crypto. For some reason I no longer have the aversion I once did to a global currency but I think its because I realize that jurisdictions will end up with tax power even if they can’t monopolize a currency and sense (because I can’t claim to fully understand it) that the real gain will be an end to speculation and resultant artificial scarcity (in the negative sense) that pegging enables.
Consider the following:
The main point of tax is to get people to mingle to drive them together and identify with a society.
The first applications of writing were for domesticating humans or taxation- Sumarian- taxation
drove the development of writing.
Tax has been the core organizing principle since the start of agriculture. It comes out of the
biological pattern of storing seed.
Money, profit, debt, cooptation are functions or expressions of the tax power.
Tax is a supplemental glue beyond sex and heredity to keep the group cohesion necessary for crowd control and stability when a society scales beyond a certain size.
When a state buys, it buys demand, and generally nothing else.
Tax has always been the main source of demand or demand creation in society.
Tax has been the primary axis for the fungibility of money and power the only axis that makes sense even as it has always implicated technocracy- regardless tax forms the primary link between money and power and it will be there after fads in bribery like lobbying-sponsorship are gone.
Again, Crypto will not lock out taxes just drive them to more to tangible assets.
Tax is what enables and props up fiat currency which is made of quantized demand (pure fiat is
better than pegged fiat- but pegging is just another tax- (a bad one)
Tax is the main habitual reinforcement of a currencies’ mind share and of state mind share ultimately- currency’s mindshare is a function of tax.
Tax is the core of demand based money and this holds even when the tax is tied through scarcity
inducing economic processes such as mining physical or virtual.
Tax one person give it to another, this is designed to create discourse, which surprisingly is the core
reinforcement of societal identity and also the core of state power
Many things are taxes that are generally not recognized as such including Fed interest rate changes, loop holes which dissuade abuse of money power, and actual strategies to address inflation and deflation, printing money, also sponsorship which taxes time, attention and speech but again drives discourse and the cohesion priority.
Tax trades liberty for security/control but by degree, its point of leverage or germinal point is the common defense, it is ultimately a crowd control problem e.g., channel people down a street and make sure they don’t crash at intersections by providing stop lights.
Tax is a technology of control, it makes money and power fungible and places the technocrats in control but in any society that has moved beyond hereditary tribalism the technocrats are always in control because of taxation.
Tax makes the enforcement of law practical and therefore makes law possible.
Tax even expresses as regular low grade fear injection to keep the body politic molten and pliable so as to avoid ideological hardening and the certainty that leads to disruptive uprising- a distraction tax.
When colonial Brits were saying that American homesteaders were so free with so much access to liberty that they couldn’t be made to do anything the Brits weren’t necessarily saying liberty was the problem but that there wasn’t enough of a basis for societal cohesion to provide for the common defense- at that point the tax was missing either in force or actuality.
When Tyler was saying the people could vote themselves a share of the wealth charitably this was really saying they would grab control of the tax power and lose the common defense etc.
Post nuclear weapons and post solution of “the economic problem” (50 years ago) the technocrats are enshrined in power more than taxes already allowed for.
Every modern technocratic state is a pure welfare state, it taxes everyone else and hands it over to everyone so that people don’t drift apart, it fertilizes relationships even those derived from overwork (another tax function to drive people together) to preserve the control needed to hold the social fabric together.
The isms in a sense are truly dead including capitalism, communism and socialism- but top down centralized technocratic crowd control totally planned welfare culture is not dead because keeping the peace is our highest value- its a reflex prior to our concern over conformism vs liberty, our value of due process is an expression of this priority.
Its much easier to have a dissuasive loop hole or a tax subsidy that to tells people “no”- just change the scenery, build a berm or take down a bridge or build a bridge- this is way easier than legislation and is technical carrot and stick classic tax policy.
Tax is what happens while we are busy philosophizing its the contingency, the glue. People try to lobby and sponsor to nudge technocrats saying for instance that they have great sums of capital to look after and should be given privilege but its ultimately an argument with technocrats over the likes of rotting capital and letting it burn (a defacto tax) or the paradox of thrift or addressing deflation or inflation.
The utility here is what the insane neocons were talking about when they said the “rational state’s only objective was the increase of its own power” or things along those lines. It wasn’t saying power without end but charitably just trying to maintain the tax glue in the face of increasing population scale etc. Well that’s too charitable they only believe in the right of the superior (who they choose) to rule over the designated inferiors (their detractors)
Technocrats are mediators that is the sausage making of tax.
SAFE’s PTP is a Tax.
If trumps tariffs are just another petrol bailout, petrol itself is just another tax. Tariffs are the nuclear weapons of taxes. They are being used to try to convert power gained in 70 years of persisting in petrol past its useful life into buying a little bit of time (too late) against lower cost of goods coming up green economies.
Historical origin of Tax
After finding that it was possible to domesticate only a very small number of first plants and and then only possible to domesticate a very small number of animal species man turned the knowledge gained in these domestications toward domesticating or civilizing of man. There was a pattern with seed reproduction in agriculture such that seeds had to be stored for winters and the next planting, this was the introduction of the tax or the banking pattern (money and banking are functions of tax.) As it turned out members of a clan or family had trouble dealing with strangers without violence and with the increasing scale of groups it was therefore necessary to have a police force to keep the peace and that required a tax to support the policing specialization. Prior to agriculture in small groups without specialization, gifting barter without definite time frames for reciprocity was the norm. With scale came specialization and with different skill sets and varying abilities individuals accrued surpluses that were of no use to them individually that needed to be redistributed for the good of the whole. Again this was a tax. So you can see it grew out of crowd control and refuse functions and roads. Peace and defense are the germinal instance for a tax. (can look up Jared Diamond’s work on some of this)
Tax in organic systems
You can see this function at scale in organic systems with circulatory systems and such systems tend to be autonomic or or at least partially involuntary. Think of the blood as something like money. Individual cells are dependent on the survival of the organism and the organism is dependent on their individual contributions for survival and the circulatory system both gives and takes away and hence the flow of blood brings goods to each cell but also taxes each cell.
Progressive Taxation is not what it seems.
Progressive taxation is not about getting those who can most pay to pay more, because that assumes greater contribution in the first place. That is not an assumption made by sober people. No, what progressive taxation is about is allowing the rich to keep their name associated with product that other people created/produced (even by putting in place a chain of automation) as long as they do responsible things with the product by using the prescribed loop holes at tax time. When they do otherwise they they pay the full tax (which could have be 94% as it was for a long time in the US) or go to jail for the abuse of the power of money or abuse through the use of undue power generally and so progressive taxation is about dis-incentivizing greed. Progressive taxation also recognizes that allowing people to have control over the way money is spent is generally much more efficient than having the state introduce other steps by less interested more abstracted parties into the process (See Neil Gabler’s Disincentivising Greed)