Taxing the wealthy won’t work. A cryptocurrency might. (Part 2)

Taxes are for putting money in the hands of the government, not the citizens.

The more taxes the government collects, the more resources they control.  The more resources they control, the closer we get to the original problem: too many resources in the hands of too few.  I think that just about all of us agree that there needs to be a more functional distribution of resources but it’s not as simple as taking resources away from the wealthy.  Especially if you’re shifting those resources to the government and not the people.  Let’s not forget that we have a government which is more likely to see value in socialism for corporations than socialism for citizens.

If our goal is to put resources back in the hands of more people, maybe there’s a more direct approach.. A way to accomplish that outside of the government.  Maybe there’s the potential for a currency which bypasses tax and simply redistributes itself without the potential for a corrupted middle-person like the government.  Perhaps a cryptocurrency with an automated distribution curve that ensures nobody ever receives less than a basic cost of living.  Because how does that benefit the society as a whole?  They require inefficient social assistance programs which require tax dollars anyways.

A lot of people see how much we’re struggling right now and think that it’s because wages need to rise.  Well, that might not help if the cost of living continues to rise more quickly.  What we really need to do is recognize that income is only relevant when compared to what we spend our money on.  We could all be billionaires and it would mean nothing if the average home cost a trillion dollars.  We need real a benchmark.

Right now, our poorest people receive so little support and so few opportunities, that their environment does a better job of keeping them where they are as opposed to helping them rise above their circumstances.  That needs to change.  Our baseline should be an environment that lends to creating successful people, not one which holds them back.  Based on that, being poor would mean that you could still afford: A comfortable living space, healthy food, quality clothing, transportation, broadband internet and a smart phone, education, savings, and a disposable income.  Imagine that, our least fortunate being given every opportunity to make something of themselves and live a good life.  Do you have any idea what that would do to our nation’s productivity?  That alone would increase the nation’s average IQ by double digits and slingshot us into the next industrial revolution.

Lets’ say that the average income needed to produce that lifestyle was $50,000 per year.  Sounds steep?  In 2018, total household wealth topped $100 trillion.   That’s about $300,000 each across 350 million people.  If it only costs $50,000 per year in resources to ensure that someone has every opportunity to become their most productive self, that’s starting to sound like a downright brilliant investment.  As they spend that $50,000 in resources throughout the year on things like rent, or professional services, or education, or eating out, those resources simply flow to others within the economy based on free market principles.  This still leaves plenty of resources left over for a strong middle class, and plenty still, for the most productive geniuses among us.  And let’s not forget that when the lower and middle class have savings and a disposable income, they can invest in the great ideas of others, whether that be big companies they like, or good friend with a great idea.

If you could tie that distribution curve to a basic cost of living and a basic standard of living.. with the idea of promoting competition with a well resourced diversity of thought, and reaping the rewards of a meritocracy of ideas.. I think it could absolutely be something special.  But it’s not without it challenges.

When I come up with an idea like this, one of the first things I ask myself is how I would undermine it.  Generally speaking, if I could, then someone else would.  Like how would someone buy into this cryptocurrency?  If it’s like any other foreign exchange, what would prevent someone from buying 1 dollar of the currency, and then having it topped up to $50,000 through an automated rebalancing while they keep the rest of their money in USD?  How would the currency even know who to rebalance it to?  And how exactly are you ranked in this distribution curve?  I don’t see how this would work without other pieces in play.

One of my most successful strategies in devising solutions to problems is thinking outside the box.  I know it sounds cliche, but I also think it’s relevant.  When we’re talking about a functional and effective distribution of resources among a population, just about every solution we’ve come up with includes making adjustments to the current tax system.  That means using the government as a mandatory intermediary and decision maker.  Considering that the government has managed to rack up $22 trillion in national debt with no plans of reducing it, maybe that’s part of the problem.  Maybe they’re part of the box that we have to think outside of.  But what if outside the box is uncharted territory?  Well… a blank canvas usually requires some innovation and a willingness to create something new.

For a cryptocurrency to functionally redistribute resources across it’s users, it would have to know who they are.  It would need a fair and accurate mechanism to evaluate their merit to determine  the level of resources they should have access to.  I’m tempted to say that’s a whole new set of problems… but perhaps that’s not the right way to look at it.  Perhaps it’s a whole new set of solutions… ones which together, form a new platform for organizing wealth.  Perhaps we’ve taken our current platform to the limit of it’s efficacy… a society in which we know the price of everything and the value of nothing.  Perhaps next up, we can devise a system which cares about the price of nothing, because it understands the value of everything.

While not without its challenges, this concept has one rather remarkable advantage.  A currency like this, if feasible, could be remarkably popular among the masses.  If they chose to adopt that currency in a mainstream manner, it would destroy the value of the USD.  The top 1% who would avoid a currency like this at all costs, would see the value of their estates drop dramatically.

Author: Author

In an age of promotion before substance, let's try substance before promotion. I'm hoping anonymity will help keep a focus on the ideas but I do understand wanting to connect to the person behind them. Let's split the difference with some fun facts: I have a professional crush on Harvey Specter, Bruce Wayne is my favourite superhero, and I share a personality type with the likes of Warren Buffet, Steve Jobs, and Lex Luthor.

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