Can you elaborate on it? The description is super hard to understand

[serapath]

Maybe a formalized example could help?

var A = {
  taxemes: ['5%', '3%', '2%'],
  cash: '50'
}
var B = {
  taxemes: ['20%', '3%', '2%'],
  cash: '30'
}
// Steps inside of transaction: "A pays 10 to B"
A.cash = A.cash - 10
B.cash = B.cash + 10

in that stuff above, taxemes have no effect. Maybe you can show where they come from and what they do and their whole life cycle + where is the cash coming from in the first place? :-)

[JeffreyBPetersen]

I'm still learning the concepts, my main role so far has been implementation. All credit for the idea goes to Johan Nygren.

The current model tracks taxemes by rate and volume. Individuals in the system each have a list of taxemes in ascending order by rate. At any given point your active taxeme is first in the list. Individuals also have a personal taxeme, which is a rate they set and has unlimited volume. When A sends cash to B, B pays the proportional rate of their active taxeme and an equal volume of B's active taxeme is transferred to A. If B's active taxeme doesn't have enough volume to cover the transaction, then B's next lowest rate taxeme becomes active and the transaction continues. When taxemes stop circulating in this version isn't entirely nailed down yet. The current idea is that when you introduce any volume of a particular rate taxeme into circulation, that you then remove an equal volume from circulation if a taxeme with that rate would otherwise be passed on to you.

To give a formal example

//before
var A = {
    personalTaxemeRate: 0.2,
    taxemes: [{rate: 0.1, volume: 10}, {rate 0.3, volume: 30}], //kept sorted by ascending rate
    cash: 50
}
var B = {
    personalTaxemeRate: 0.3,
    taxemes: [{rate: 0.05, volume: 20}, {rate: 0.1, volume: 10}], //kept sorted by ascending rate
    cash: 250
}

B.send(50, A);
/*
B.cash -= 50;
var remaining = 50; the remaining cash in the transaction
A's active taxeme is determined by comparing A.taxemes[0] with A.personalTaxemeRate, A.taxemes[0] is active as it has a lower rate.
rate = A.taxemes[0].rate
A.taxemes[0] only covers the first 10 of the transaction:
remaining -= 10;
A.cash += 10 - rate * 10;
taxesCollected += rate * 10;
A.taxemes[0] is moved to B.taxemes where it is combined with the volume of B's existing 10% taxeme.
A's next listed taxeme now has a higher rate than A's personal taxeme, so A's personal taxeme is used for the remainder of the transaction.
rate = A.personalTaxemeRate;
remaining -= 40;
A.cash += 40 - rate * 40;
taxCollected += rate * 40;
B then inherits the taxeme {rate: 0.2, volume: 40}.
Tentatively the newly created taxeme would also be added to A.createdTaxemes as well as subtracted from any existing volume at that rate from B.createdTaxemes before having any remainder added to B.taxemes
*/
//after
var A = {
    personalTaxemeRate: 0.2,
    taxemes: [{rate 0.3, volume: 30}], //kept sorted by ascending rate
    cash: 100
}
var B = {
    personalTaxemeRate: 0.3,
    taxemes: [{rate: 0.05, volume: 20}, {rate: 0.1, volume: 20}, {rate: 0.2, volume: 40}], //kept sorted by ascending rate
    cash: 200
}

The cash for now would likely be supplied by whatever amounts of ETH people choose to send using the contract.

We're still getting things figured out if you want to join in on the Slack channel.

[serapath]

1. Ok. I think one of the biggest problems in economies is, that they only have supply chains, but not supply circles.
2. In an economy without money, person A trades apples for B's potatos for C's haircut for D's bread for E's cake for F's bananas for G's milk...
   • So A has a complicated task of getting milk for his apples ... he has to find all those inbetween trading partners to build a supply circle, where everyone gets what he needs.
3. If you introduce money in an economy, this problem is simplified, because everyone accepts money, so you can trade directly - but it only works if in the end the same supply circles as in (2.) are created, which doesn't happen automatically as you can see by looking at realities inequality.

So how can you create an incentive for people to close supply chains to become supply circles? The answer in the context of taxemes might actually be, that taxemes introduced into the wild only disappear if they return to their originators :-) This is a very important function, in my opinion actually the most important function of all the functions... because it's an actual problem for which taxemes might be a proposed solution... because if they are not a solution to the problem i try to describe above... what do they solve in general? Why would anyone introduce them at all otherwise?

[serapath]

joined the slack channel, thx :-)

[resilience-me]

@serapath Ryan Fugger described a form of decentralized money, back in 2004, and he called it the Ripple framework. It's based on supply circles, and the idea that value exchanges eventually end up forming closed loops.

http://archive.ripple-project.org/decentralizedcurrency.pdf

8 years later, Jed McKaleb and some other dude continued Ryan's work and started building what is now Ripple.com. And, Vitalik Buterin recently mentioned that there might already be a few credit line dApps on ethereum, https://twitter.com/ianjmeikle/status/671075982384766976

The Ripple framework reveals how trade is circular, and how it's always been circular, tough the centralized narrative and centralized design of money has prevented us from seeing that.

I was inspired by Ripple when I conceived of both dividend pathways and taxemes, and I imagine it will work really similar to Ripple - I've seen it as an extension and evolution of the Ripple protocol.

Here's a map of ​dividend pathways​, http://graph.basicincome.co

Compare it to a map of Ripple credit lines, https://www.ripplecharts.com/#/graph

Video: Ryan Fugger, Creator Of Ripple, About The Trust Network

[resilience-me]

The answer in the context of taxemes might actually be, that taxemes introduced into the wild only disappear if they return to their originators.

I like that :)

I was thinking that ​taxemes​ would collapse similar to how Ripple credit-lines are cleared. That's how I first conceived of it 3 years ago, "if Ripple can do this for credit, couldn't it do the same thing for tax-rates?"

The first idea I and Jeffrey talked about was to let them be destroyed when they return to the originator. But it felt like that was the wrong solution, so the second idea was to let them be destroyed if they return to someone who has originated a ​taxeme​ of the same rate. Neither solution feels perfect, feels like there's a smarter way to do it.

[serapath]

it could also be, that they disappear if someone gets a taxeme where the originator of that taxeme also has one of that someone :-) ...so some kind of "clearing mechanism" ... more general, that could also happen if there was a circle - in case the volume is the same even though the rate of the taxeme might not be.

Thus:

• A has [{value:1000, rate:'20%', originator: 'B'}]
• B has [{value:1000, rate:'10%', originator: 'C'}]
• C has [{value:1000, rate:'15%', originator: 'D'}]
• D has [{value:1000, rate:'5%', originator: 'A'}]

So all of those taxemes could be removed maybe...

[resilience-me]

it could also be, that they disappear if someone gets a taxeme where the originator of that taxeme also has one of that someone

:) the design right now is similar to that, that taxemes are destroyed if they return to someone who has originated a ​taxeme​ of the same rate.

Now that you brought up that pattern of volume being the same, it reminded me that the current design makes more sense to me if modelled and understood similar to how Ripple IOUs are cleared, as a taxeme balance.

A.taxemeBalance = [{tax-rate:'2%', inherited: 0, passedOn: 100}] B.taxemeBalance = [{tax-rate:'2%', inherited: 100, passedOn: 100}] C.taxemeBalance = [{tax-rate:'2%', inherited: 100, passedOn: 0}]

If A inherits 100@2% from C, A.taxemeBalance.inherited += 100

The taxeme balance between all nodes balances to 0, and the taxeme will collapse.

[serapath]

I don't quite get what you mean with inherits, maybe another word would help?

But then again, what problem is the "taxeme" trying to solve? What if there were no taxemes at all? what would be worse?

[resilience-me]

Taxemes are a form of decentralized tax-rate governance system. They solve the problem: how do you govern tax-rates in an economy that has no borders and no pre-defined boundaries.

They are based on the darwinian principles of variation, selection and heredity. Variation as in each node sets their own personal taxeme tax-rate. Selection as in each node selects what other nodes to consume from, and by doing so it selects what taxemes to propagate. And heredity as in each node inherits the taxeme of the other it consumes from, and spreads it the way a virus or a parasite spreads from host to host.

[serapath]

People already donate today and maybe people can just propose project which would be beneficial to others and pay for them. Other things might be solved through insurances... I'm not convinced some kind of tax is necessary actually. Why do you think it is?

[resilience-me]

Resilience is at it's core a basic income system. The tax that's received through taxemes is distributed to humans through dividend pathways, and elevates them above the poverty threshold. The idea that it could be used to automate crowd-funding of different projects and insurances is just a secondary feature.

Basic income has been called "the Social Vaccine of the 21st Century" and I've said that

basic income is really a memetic technology, that changes how we perceive the boundaries between ourselves, it decreases the costs of empathy and connectivity. It´s a p2p-technology that decreases the need for hierarchical narratives, and it will fundamentally transform a society´s memetic environment.

and I think it's one of the biggest revolutions out there right now. Finland is voting about UBI next year, Holland is doing two pilot projects next year as well, and my Resilience adds a tax-system that scales to a post-nation-state world.

The current systems can't scale to borderless economies, they're centralized. The other UBI dApps out there, probably 3-5 on ethereum right now, don't really scale that well to a global economy either, so the taxeme framework might be a solution to how to do tax as a decentralized organization.

[resilience-me]

@serapath my idea that i had a long time ago, it's three years ago now, is just that Ripple IOUs could be "forgiven" if people don't manage to pay them back. so, debt could decay. this would happen through "wealth redistribution". i couldn't see how it was decentralized to say that "all transactions are taxed with 2%", so i thought a bit if I could come up with a decentralized solution to that. it's a long time ago now but what i came up with was something similar to "if everyone sets their own rate, and if I send an IOU to someone else, i'll inherit their rate"

that was my reasoning. a sort of free market mechanism for setting transaction taxes that make IOUs decay in case people can't afford to pay back their debt, and there happens to be a surplus in that economy.

[resilience-me]

@serapath and it doesn't even have to be basic income. it could just be that IOUs decay at a rate that's close to a basic income (Finland has set it at $900 a month) - so, that if you're unable to pay back your IOUs, then they'll decay up to one basic income per month. I used dividend pathways to try and translate it for those who didn't know about Ripple and IOUs and credit-lines, but the original idea i had three years ago was to just let credit-lines decay

[resilience-me]

@serapath it may be a stupid idea but that's what i thought three years ago: let IOUs decay, so that you can in-debt yourself a bit even if you happen to be unable to pay back. it also sort of makes Ripple work better, since you can trust people to pay back up to one basic income per month (since they're given that by the trust-network.)

and i then thought about some type of agreement where the entity who received an IOU would have set how fast that IOU should decay, and that the money that pays for that should come from the ripple economy.

[serapath]

As far as I understand, this is a feature on top of some form of "money" that is already used in the economy. Maybe it's obvious, but i wonder...

Question 1: Why do you want to tax transactions instead of someone's current balance? Question 2: When somebody pays the tax, who receives the money?

[resilience-me]

Question 1: Transactions - IOUs - could be seen as a map of how value is created in an economy. If you are unable to pay back an IOU you have issued to me, then future value added, IOUs created after your IOU, could perhaps be used to let your debt decay. That's why I tax transactions.

Question 2: Transactions - IOUs - could be seen as a map of how value is created in an economy, and could be used as a map of who receives the money.

[serapath]

I see it like this (maybe it's the same as what you are saying...):

• someone X puts in work/effort to provide a product/service to someone else
• in return, X gets a promise (expressed through money) that in the future he will receive something too
• This could be seen as an IOU from that someone else (=customer) issued to X, right?

...but that would be in case the customer is actually creating money, but I guess you are applying what you say on top of an existing "payment infrastructure", so in order for the customer to get the "money" he pays X with, he already provided some work in the past.

In your answer, I feel that you are saying the freshly minted IOU from the customer doesn't go to X, but instead it goes to 80% to X and 20% goes to... himself or someone else that he received an IOU from.

Again: Are you saying, X puts in real effort/work to provide product/service to Y. Y in return provides an IOU (a promise) to X and if X uses that IOU to pass it on to Z in order to receive a service/product from Z, Y is "profiting" from it?

I agree with the general statement, that "Transactions" (given that they are not fake), could be seen as a map of how value is created in an economy. Somehow I believe this should be rewarded or at least not punished, which means, every transaction that actually creates value should be seen as something that is amazing and even trying to create transactions of value should be rewarded (=entrepreneurship). Being passive, not doing anything and sitting on money is not productive.

If transactions are taxed, people rather wait for nice opportunities instead of just trying. This behavior is destructive if it becomes a mass phenomenon and in order to get rid of it, debts around the world increase, just because if the government is not spending, the economy would dry out and collapse.

So their should be an incentive to keep the money going...

[resilience-me]

The idea is to use transaction pathways as a sort of web of consumption to show how value has been created and consumed, and to then use that as a network to share wealth. Tax/dividends/shares would flow throughout the network similar to how electricity flows through our cities. So, that's the idea, use transactions to map out a web of consumption, and then power that web with wealth sharing that reaches everyone who's tapped in. The pathways are consumed as wealth is shared through them, like how the tungsten in old lightbulbs is consumed when electricity flows through it.

Video: Dividend Network

Interactive graph of old prototype network: http://graph.basicincome.co

“In my Basic Income #DApp, your safety net emerges from the sum of your financial interactions, allowing you to live and evolve as a global and mobile citizen. Basicincome.co transforms the stage upon which we unfold.” -Counssource.com, 2014

[resilience-me]

The reason I'd participate in a wealth sharing network isn't because I was forced to but because I want to see social resilience in the world around me, I want to see my peers and my culture transcend poverty and the pyramid of maslow.

So, the tax to me wouldn't be negative. It's not enforced in anyway except through free market mechanisms, and all of it is used to fuel a basic income culture.

[serapath]

1. I agree, Transactions map out the web of consumption.
2. I'm also for a mechanism to power that web with wealth sharing that reaches everyone who's tapped in.

Still, it doesn't make sense to me to tax transactions, which basically creates an incentive to not spend do or less transactions the more risk or even uncertainty is involved.

My Reasoning:

• "Money cannot be eaten" - it's worth only something, because others provide products/services for it
• If nobody spends money, the economy stops, while depreciation of assets continues, thus damage.
• If people spend money in transactions, they try to create more wealth.
• If people have to pay a tax on transactions, that's creates an incentive to not spend do or less transactions the more risk or even uncertainty is involved.
• If people have to pay a tax for hoarding money, that creates an incentive to spend, thus make the economy produce more wealth.
• If everyone spend/pays often enough, everyone will be able to earn money from being paid, so there is less need for a UBI.
• If people don't make transactions, those with "currently" little money, who might want to make further transactions (spend or earn) cannot, because those with "currently" more money don't spend, which creates more need for a UBI that might come from a tax on someone's current balance.
• Someone who wants to "save" is someone who actually is wealthy enough to "save".
• Someone who is wealthy enough to "save" should have the responsibility to think of what to save for and not put that responsibility on those who currently have little.

Some explanation to clarify the last bullet point: Saving money means holding on to the promise that others in the future will do something for you. If all/most others loose the capability to actually provide in the future, money becomes worthless - thus has no intrinsic value. Thinking about what I would like to have in the future makes me want to exchange my "saved money" for making a future possible, where that which I might want will actually exist, so that I can consume it....

EXAMPLE: I want to "save" for a house or car or a flight to mars. Instead of "saving" the money, so that others need to go further into debt in order to continue the economy, I will instead invest into shares of companies/projects I'd like to see in the future.

• e.g. a house building company
• e.g. SpaceX to fly me to mars when they are ready
• e.g. a car manufacturer

I will continue to BUY (thus invest instead of "save") SHARES, which means others don't need to go further into debt, because they receive money when I pay for the bought shares. My ACT of buying shares of certain companies/project that I'd like to see/use in the future helps steering the economy instead of putting that burden on those which I force into more debt by "saving".

I believe everyone who is wealthy enough to be able to "save" should actually take on a part of the RISK involved in "saving" instead of putting all that RISK on those which are already in debt.

Questions:

• Does this chain of reasons make sense to you?
• If not - where and why would you maybe disagree?

[resilience-me]

well it's not really tax, it's more like a donation, and using the platform would be voluntary. and it seems easy to tax transactions. and donating / participating is an investment in itself, since you'd invest in social resilience and in your community. As a recent New York Times article argues, “financial success and social impact are becoming ever more linked, with the lines blurring between the business and nonprofit sectors.” (source)

and i've modelled it on Ryan Fugger's Ripple, so the wealth that's shared is just trust. a small amount of trust, a small amount of each transaction, each IOU, trust being exchanged, is donated to this "resilience network" that fuels a basic income culture.

it's an investment. i see your reasoning since it's very common arguments, "spending more creates more" and that it would be dis-incentivizing and so on, but that's argument that the basic income movement has had to face for decades or even hundreds of years now, and most of us would argue that giving people basic income would create more wealth, and not the opposite. so, your reasoning might not make sense in the context of this basic income project, nor do i really believe it makes sense economically, and i believe my system would increase productivity and so on.

[serapath]

Ok, what you say is interesting. The article is nice to read.

In the example I gave above, some kind of taxeme - instead of "taxing" you when a transaction happens, it could "tax" you all the time until you make a transaction to get rid of it.

• It could also "donate" to the "resilience network" to fuel a basic income culture, the same as you mention - it's an "investment" too.

I don't say that you should not give people a basic income. I completely agree, that giving them a basic income would create more wealth, because it enables them to participate in the economy instead of being forced to do nothing. So I'm not saying that at all :-)

Wouldn't your suggestion work in a similar way, but instead of activating a taxeme during transaction it's all the time active taxing the persons balance while he has that taxeme. A transaction passes it on. :-) Through that mechanism, a taxeme would be active all the time, until it vanishes because it's "use up" - so the problem under which circumstances it should go away is kind of solved. What do you think? Would taxemes work that way? A UBI would be sure. Where do you see problems? - if you see any

[resilience-me]

@serapath if Bob hosts a taxeme of 100@2%, how would it tax his balance ? it sort of already taxes his balance since it taxes incoming transactions. would they tax at a steady rate ?

me and jeffrey talked about the idea of letting taxemes spread as spores (slack), to then become activated once they've "cleared". that would prevent people from spreading taxemes only to then abandon their account, leaving their taxemes circulating indefinitely.

not really sure how they should be cleared either. it should mirror how trust-balances in ripple are cleared. maybe they could be cleared on a first-in-first out basis as IOUs are cleared.

[serapath]

1. I'd say the same way bank accounts with an interest rate work. Even though the interest rate is defined per year, it's possible to calculate the growth of your "savings" or "debt" continuously. So yes, it would tax at a steady rate :-)
2. I'm not sure what you mean with "cleared" or what the problem would be. Once a transaction took place, a taxeme could spread and then do "it's job" no matter if the originator leaves the economy or not. If an originators account receives money, he would receive a taxeme too, so that money would slowly vanish in case he abandons the account, or if he transfers the money to a different account, the taxeme would spread with the money, so he cannot get rid of it.
3. If you tax while "holding" instead of "transaction" the clearance would happen by itself, after the volume of the taxeme is reached, no?

[serapath]

I re-read our discussion from - wow - more than 8 months ago.... So the change from LOFI to FIFO might have come from this discussion. I made a round through all the content you produced and that was spread across many places and started to try to make it consistent. I'm planning to only add the stuff that are useful in the context of what makes sense to me - which still is a preference for taxing current wealth rather than transactions... not sure yet about the details...

This repository - or let' say for now just this github issue: https://github.com/serapath/economy/issues/4#issuecomment-239686676 ...will contain the summary i will try to refine over time.

Maybe one day it deserves it's own repository :-)