8.2. State Revenue
Ideas
- The tax system is greatly simplified and automated.
- Many unfair taxes (VAT, inheritance tax...) are abolished.
- Levies impact financial income more heavily than labor income.
- Individual taxation is calculated in multiples of Universal Basic Income; it will therefore vary with it, which is allowed by the dynamic nature of the currency of the Démocratie Numérique.
- Corporate taxation protects small structures.
Individual Taxation
The Universal Basic Income is not taxed, and there is no VAT or inheritance tax in the Démocratie Numérique. However, labor income (salary) or financial investments are taxed. The rules and rates are decided by the voting. Here's an example proposal.
Labor income
All additional income from work is subject to a tax measured in multiples of Universal Basic Incomes: 5% for the first bracket, 10% for the second, etc... Up to 40% for the eighth bracket, which represents the upper limit of income tax.
This tax is borne half by the company paying the salary and half by the recipient.
Financial income
All additional income from finance is subject to a tax measured in multiples of Universal Basic Incomes: 10% for the first bracket, 20% for the second, etc... Up to 60% for the sixth bracket, which represents the upper limit of the tax on financial income.
This tax is borne half by the company paying the income and half by the recipient.
These two taxes are independent: an individual can be in the highest bracket for labor income but in the first bracket for financial income.
Real estate income
The state collects a property tax on land, residential houses, and professional premises. This 0.5% annual tax is based on the estimated value of the property, according to the latest transactions made nearby. It is deducted from the account of the owner of the NFT corresponding to the property; the tenant is not taxed.
To limit real estate speculation, the state also taxes real estate transactions, at the seller's expense, at a rate of 5% of the property value.
Corporate Taxation
Taxation on corporate profits is difficult to implement in the Software Democracy because automation of levies is always sought. However, profits can only be calculated retrospectively.
It should be noted that companies contribute half to the payment of income and dividend taxes for individuals. They are also subject to the tax on dormant capital and are therefore encouraged to invest.
Moreover, the economy of Software Democracy encourages business creation, so maximum freedom and simplicity must be maintained for small structures while avoiding double taxation of individual businesses.
Corporate profit taxation will therefore only apply progressively and from a certain level of profits, gradually reaching a maximum of 30% of profits. One can imagine, for example, a scale similar to that of labor income taxation, except that the first bracket (5%) would activate at an annual profit of 10 Universal Basic Incomes, the second (10%) at 20 Universal Basic Incomes, etc...
General Taxation
Several taxes apply indiscriminately to individuals and businesses.
Environmental Impact Tax
This tax aims to offset the environmental impact of a product or to progressively impose it within the framework of an incentive for its replacement or withdrawal.
As much as possible, this tax will be applied at the source to the product in question (example: a chemical pollutant must be taxed when it is first sold, even in a B2B context. This taxation will then indirectly be reflected in its final sale price.
Transaction Tax
To protect the blockchain from spam, limit financial speculation, and fund the maintenance of the blockchain, a 0.01% tax is collected on all transactions.
Idle Capital Tax
As detailed in the note on the currency, idle capital is subject to a small tax to encourage its activation in the form of investment or consumption. The currency
Conclusion
It should be noted that the proposals made here, while consistent with the spirit of the Démocratie Numérique, can only be decided by the vote of citizens, both in their nature and in the rates applied.