How Blockchain Can Make Governments And Taxes More Efficient And Transparent

in #hive-1679223 years ago

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Politicians in the state of Washington in the US have been trying to introduce income tax for a while now. Previous attempts have failed due to a legal precedent set by the State Supreme Court almost a century ago and income tax seems to violate Washington State Constitution. State Senator Bob Hasegawa is pushing forward another attempt in bringing income tax to the state. State and city taxes are separate from federal taxes. There are already so many taxes people pay: federal income tax, property tax, sales tax, business tax, capital gains tax, payroll tax, social security and medicare tax, etc. And there are more hidden taxes like fuel tax that is included in the price of the gas.

Taxes are normally percentage based and are not fixed amounts. This, population growth, and income increases with economic growth over the years all combined together would also mean government entities would be receiving more and more in taxes over the years. Now my question is, why do you need to increase taxes, or invent and introduce new taxes? With lack of transparency in how government conducts its business and how these tax funds are used should make anybody be concerned about the efficient use of these public funds.

All states have different taxes. Some like Oregon have income tax but no sales tax. Some like Washington have no income tax but there is sales tax. And most have combination of both taxes. I am not completely against taxes. I believe taxes do have purpose and can be put into a good use. What I question is the mismanagement of funds, wasteful spending, corrupt dealings, and never ending greed for more taxes. One simple truth about taxes is that, once one is introduced at a lower rater which may be very small at the beginning, it is almost guaranteed next step politicians take is to increase these taxes. That to me is a deception tactics. How can one trust after such manipulative lies that end up not even contribute to anything positive to the local communities and society.

Perhaps I am exaggerating a bit. Taxes can be used for useful and necessary things, and they can contribute to the positive growth of the local, state level, and national economies and the lifestyles of ordinary people. More transparency and accountability is needed, which in return may make use of these public funds more efficient and productive. As bitcoin is improving the money and making it much more efficient using this great technology knows as blockchain, the same technology can bring transparency and efficiency to the government entities.

Politicians might not been too eager and excited to get into blockchain and study its possible implementations in the government and society. But if or when they do, they may find that it can offer great deal of value and benefits for the governments and its agencies. The first rule of economics is to achieve the best possible outcome with the limited resources. I believe blockchain can help doing just that for the government entities while making them more transparent, trustworthy, and more respected.

State of Washington is home for many big companies who are leaders in their areas. Microsoft, Boeing, Amazon, Tableau, Zillow, Starbucks, Expedia, Costco, and many more very successful companies with global recognition call Washington State home. Not only successful businesses contribute to the local economies, but they also present a unique opportunity for local politicians. Imagine having access to the greatest talents these companies have brought together, and access to resources, connections and logistics these companies built. But this requires honest and diplomatic approach in establishing public and business partnerships to find solutions to problems and contribute to further developments and improvements.

Transparency and accountability are key for success here. Blockchain can help with that. Not any kind of blockchain, but decentralized and secure blockchain. Without decentralized system, blockchain cannot be secure, immutable, reliable and won't be able to provide transparency.

To make this happen, research would need to be conducted to determine what kind of blockchain can be suitable for the government operations. Most of the government data are available for public. It is just not that easy to get access to them. Everything that is already required by law to be available for all public, can be stored in the blockchain. Some data that may not be available for public at the certain time but will become public documents at some point can be stored in an encrypted format with certain permissions to agencies that can view the data and oversight entities for accountability.

Having government's daily work, documents, transactions, expenses, revenues stored in the blockchain makes them automatically available to the public, unless they are encrypted for classified categories. Since open source attracts voluntarism, there will be individual citizens, groups, or organizations that will build tools to create reports of what government does and how they spend public funds and these reports would be available to public through mainstream and/or independent media. And all of the information will be easily verifiable because they are all in the blockchain.

While adding transparency to government activities, this will also remove or reduce unnecessary bureaucracy. People will be able to transact with the government via blockchain. For example, if I need to renew the vehicle registration, I will be able to pay and request new registration using the blockchain. They would be able to verify all of the data in the blockchain automatically and make the process faster without any intermediary agencies. All of government business will become much more efficient all of the sudden.

Of course this will require some initial investment to build proper software for use by government workers and training them how to use. If done right this software wouldn't any different than what they already use today, maybe better. This transition does not have to be quick. It can be achieved step by step, connecting one agency or department after another. Most people using the software or website will not even notice the difference that they are interacting on the blockchain. But they will know everything is on the blockchain if there is a need to look up the old transactions or verify the information.

This will improve inter-agency and inter-department transactions and dealings as well. If something is not being done on time, timestamp will hold them accountable. With this newfound transparency, governments will earn more trust and respect from the public. This will encourage public voluntarism to help make things better. This may also increase donations for various causes if there is a need. At this point government will be able to make a stronger case if they still need more taxes, because their reasons will be based on verifiable facts.

Perhaps, it is too early for blockchain implementation by the governments. Only because the move slowly. Technology is already here and ready for use. I wouldn't be surprised if any government showed interest and asked for help, there will be altruistic minded talents who would offer their help or services to make something like this a reality.

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Every change that can reduce bureaucracy and corruption is welcome. It baffles me how much folks in USA pay in taxes and has so little to show for, not even healthcare.

Brazil could really use some help on that front, we have been plagued by corruption for decades and I fear that if something like the Blockchain usage from government really happened, the politicians would find a way to game the system again.

Nice post and food for thoughts

!1UP

Paying taxes are ideal and it should be paid in accordance to the pocket of a citizen or government workers. And also it should be done legally and fairly.

I agree follow the laws which allow me to pay nothing in tax but rake in cash flow and receive benefits as my agi qualifies legally as that is what it goes off of not cash flow. Saves me 20-40K a year and if I pass away all the assets like real estate get stepped up to FMV and my kids deduct it again and rinse and repeat. Use the laws the people who added those loopholes are using not what turbotax says and if you can be self employed you can just buy assets each year like say a new hummer or truck if you made 100K that would reduce it to 0 and you have a truck you bought with a loan drive it a few years sell it and break even as you factor in the income and SE tax savings. Also once its done in the business can rotate out in certain situations to write off all of your cars just use them for business use until there deducted then convert to personal use after. Need to look at some req first but it is possible. Also using mileage on a cheap beater is usually best as the miles can exceed the FMV and leases usually the actual expenses are better along with expensive cars and trucks. Like the Hummer - new one could take a 100K loan deduct 100k used only for business or less if advantageous.

Without decentralized system, blockchain cannot be secure, immutable, reliable and won't be able to provide transparency.

I totally agree on that because been a decentralized system really have a role to play to maintain and secure the stability of the blockchain to another level.

Blockchain technology has started and its currently in its infancy.We already saw how it can be securely manipulated.While there is no sort of tension for being leaked in storing the vital information, here, just like you said,state level agencies can avail the tech.
Through this we could see a better service, in banking monetary sectors,tax bills, customs and in places where the auditing and finance take place.Surely,this would be stunning to see being implemented.
A nice one of post,100% upvoted, 🙂👍

I am not aganist taxes as long as they are collected fairly. It is always easy for governments to collect tax from workers; however it is not the same for companies.

I have been thinking for several years now that voting and everything related to the recording of public spending can benefit enormously from a technology like blockchain, they can simply go hand in hand perfectly

We have the largest tax burden here in germany! An example:

50% if you‘r income is gone because taxes,
if u buy something there will also 18% taxes within etc.
Of course we have a good healthcare system and nobody has to starve but to many are doing nothing and get a small money from government and the working people have to finance that.

Anyway back on topic,
yes with crypto they can track any trade or income that somebody make.
So it‘s an advantage for them…

Because we have to reduce their debt with they taxes 😠📜

Use the tax loopholes like borrowing instead of selling in brokerage and crypto to a safe extent for your situation. Be self employed and you can basically ask yourself what do I need my income to be to result in the best tax outcome. Also in Puerto Rico you pay no capital gains tax I believe and since I can work from anywhere I will be working from there 184 days so I can maintain residency in NY and Puerto Rico saving taxes on capital gains as I will only work in Puerto Rico. Still need to research further but will be looking at it heavily.

A better system (don't think there could be a slower, NOT efficient or transparent system would be good. If crypto transactions could be used and the system automated would improve things greatly.

True!!!

Introducing new and multiplying taxes may or may not be necessary when there is a transparent system where everyone can see how the income generated is being used. If there's need for more, it will be clear to everyone and no one will respond grudgingly for it (well, there will always be people who'll oppose every idea).

The idea of blockchain technology will help in making the system transparent.

But do they want transparency?
NO!

And that's why they are continually kicking hard and opposing the legal acceptance and implementation of Crypto. Because the transparency of the Blockchain will put an end to the corrupt practices and siphoning of project funds.

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The people at the helm of affairs I’m sure know all these but it’s just so sad they won’t conform to this at least not anytime soon because of their obvious selfishness acts. Decentralized blockchain will starve their gluttonous stomach..

I don't know if it will really help that much because I think the issue has to deal with the laws and stuff related to taxes. There are so many loop holes and other things that I don't think most people will be able to understand what is happening even if it was transparent. So I think the first step is to definitely going to be revisiting those laws and making things written out in a easy to understand way.

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Use those loopholes to your advantage. It will help you grow your wealth way faster than someone who does not and makes more. I paid less tax at the firm when I was a W2 than someone just starting lol.

While loop holes are nice, most people don't pay that much for accountants so it tends to be the rich who get to take advantage of this. You can definitely pay less but it might not make sense to someone with lower income to do so either.

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I see the value of blockchain and open source as a way to eliminate the need for taxes as we know them.

As someone with a keen interest in governments and history, I see no evidence that they would use this tech in an open and transparent way. Everything they do will always morph into the antithesis of the good they claim to be doing. That is the constant of all governments throughout history.

An efficient government is likely the most terrifying thing imaginable.

Now we have the tools to change the paradigm completely.

Instead, blockchains can be tailored to eliminate government funding schemes like taxes and inflation by giving us a voluntary and fair means which actually competes for our attention and resources instead of mandating them.

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Reading your article reminds me of my favorite quote on taxation:

You compare the nation, perhaps to a parched tract of land, and the tax to a fertilizing rain. Be it so. But you ought also to ask yourself where are the sources of this rain, and whether it is not the tax itself which draws away the moisture from the ground and dries it up?

Source: "That Which Is Seen, and That Which Is Not Seen" by Claude Frédéric Bastiat

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I believe that taxes are the base of a country, so of course, they should be collected and everyone should be paying them. But they should be also proportional to the personal income of everyone, and this is not always the case, add the fact that a lot of people don't pay them, and here you have a broken system.
If there is a way to guarantee that there is no one who escapes from this and the system is fair then I am totally ok with it, and I agree that blockchain technology could be of great help in this situation.
So let's see what happens...

Have a wonderful day 😊

If that would work I would have no issue but as it is now I am taking full advantage of my tax knowledge to not pay tax legally.

Ahahahah fair enough