How Flow Taxation works as Pointtax

Earlier, we explained Flow Taxation which is based on dividing the tax equally among the parties in an exchange. This fulfills all of Adam Smith’s Taxation Maxims.

We implement it through Pointtax is a taxation system that is based on points which represent barter-credits pegged to the value of grains such as rice.

For example, John, an apple farmer, purchases 1 cake slice from Martha worth $2. Assuming 1 kilo of rice is $1, then John owes Martha 2 points.

Assume 1 kilo of apples is $4 or 4 points, and Martha accepts apples as payment.

• It follows that John can give 500 grams of apples to Martha to clear his debt.

Assume that the sales tax 10%.

• After the first transaction, Martha owes a tax debt to the local government of 0.2 points, which can take the form of 1/10 of the slice of the cake.
• After the first transaction, it is John’s turn to owe a tax debt to the local government of 0.2 points, which can take the form of 100 grams of apples.

How Will Tax Be Collected?

The tax debt will be claimed by government employees who are interested in the products and services of John and Martha.

For example, a government worker can ask for a slice from Martha when her tax debt reaches 2 points from the current 0.2 points. This will clear her tax debt.

What If The Buyers Don’t Pay?

Delinquent taxpayers can be prevented from availing of government services until they pay, such as:

• Exiting the country
• Registering vehicles and property
• Getting licenses such as driver’s license, professional license, marriage license, etc.
• Voter’s registration. This is the most important feature of the tax system because it is the first step towards a fair, regulated democracy as it will prevent the unproductive and selfish citizens from electing leaders and having a say in the direction of their society.

In David Hume’s proposed political system, the basic productive value of citizens is one of the key requisites:

This system solves the following problems: