Flow Taxation

Taxation is the main revenue source of the society organism, as a state.

Ideally, this revenue should be voluntary donations in line with the natural revenue of the Thinker class which represents the Fourth Law.

However, because of selfishness, this contribution has to be forced onto the people.

Currently, Economics taxes the working class the most. This is because it was based on the Mercantile system and merchants do not want to get taxed. This is why they constantly lobbied for subsidies and even tax exemptions in the pretence that they were so important to the economy.

There are 2 ways for governments to fund themselves:

1. Tax Revenue

This manifests as income taxes which can be anything from short term capital gains to profits from daily sales.

2. Non-Tax Revenue

This includes:

• revenue from assets, like a fund that earns interest
• government land that earns rent
• revenue from state owned enterprises

Unlike the current economic system which classifies taxes under the time factor, as short term income taxes and long term capital gains and estate taxes, Supereconomics classifies them based on revenue type based on the 4 classes:

Taxes on the Working Class as Wage Taxes

This is salary tax or labor tax.

Taxes on Warrior Class as Rent Taxes

Estate and Inheritance taxes

Taxes on the Trading Class as Profit Taxes

This is the most common tax made up of:

• Sales Taxes
• Capital Gains both Short and Long term
• Profit taxes
• Excise Taxes
• Value-added taxes

Taxes on the Thinking Class as Donation Taxes

These are taxes on thites, donations, prizes, and grants.

Flow Taxation: All Parties are Taxed Equally

Supereconomics uses mostly the points-based valuation and exchange system. And so there is less change for hoarding and subsequently the accounting for what is hoarded.

In the current economic system, a 10% sales tax is passed on the buyer to be given and paid by the seller to the government. If a man buys bread for $10 then he will have to add $1 to pay the tax, which is then remitted to the government by the baker.

But in our proposed system, taxes are divided equally between the parties in the trade.

• The buyer will owe the government $1 which he has to pay himself.
• The baker will also owe $1.

The main difference is that they can pay in kind based on the list of things that they can give to the government.

• The baker can give $1 worth of bread.
• The buyer can give $1 worth of whatever he has registered as his skill.

This will make the 10% tax rate too oppressive. And so it can be reduced to 5% or less since it is applied to all parties in a transaction.

What if a child buys the bread?

Normally, toddlers do not buy things. We expect that points-purchases can be allowed from 8 year-old upwards, when multiplication and division are mastered.

However, taxation can begin at a later age that can be decided by lawmakers.

Advantages

If done as a centralized system then taxation can be greatly simplified and costs reduced. No longer will people need accountants and tax experts. They can check their tax dues by themselves and dispute the ones that they think are not valid.

More importantly, it fulfills Adam Smith’s Four Taxation Maxims:

1. People should contribute towards supporting their government in proportion to their respective abilities

Flow taxation allows people to pay in kind with their own product or labor

2. The tax which each person pays must be certain and not arbitrary

The taxation is based on whatever product or service the person registered in the system

3. Every tax should be levied at the time and manner most convenient for the taxpayer

Each taxpayer can pay when his tax dues have been accumulated

4. Taxes should take out as little as possible from the people over and above what it brings into the public treasury

The administration requires only an audit of the actual productivity of the taxpayer, aside from the values recorded.