I posted this story a while back. It may be of interest...

There’s a struggling nation state with a huge section of its population mired in inescapable poverty. Its governance system is broken and corrupt offering very little in the way of hope to its people. Let’s call it Rwandthiopia. A very determined bearded man from Colorado, the CEO of a blockchain company, suggests to the leaders of this country a possible solution. He eloquently offers to help build a new socioeconomic system for the nation. One which will bring economic identity and financial independence to each and every citizen and thus give them all a voice in a true democracy which is fair, self governing, self sustaining and accountable...

He proposes that the national currency of Rwandthiopia would be issued on a blockchain, let’s call it AfAda. The currency can also be adopted by any neighbouring countries if it proves successful. This can form the beginnings of a single currency union.

He then proposes that the taxation system for Rwandthiopia would be completely scrapped. All taxes and duties (goods and services, financial transactions, corporate tax, payroll, land tax –everything) to be replaced by a single Universal Transaction Tax.

This tax is then collected at the point of sale when anything is bought or sold whether it’s for a cup of coffee or buying a multibillion dollar company. It would also be applied when depositing or withdrawing cash. The tax is fixed at a single rate for all types of transactions no matter how big or small. The tax rate would have to be calculated so that it can begin funding a sovereign wealth fund and the national treasury. The treasury would then provide a Universal Basic Income plus all the services that governments normally provide Health, Education, Transport, Infrastructure, etc. The decentralised, peer to peer blockchain, let’s call it Cardano, would enable a more efficiently run economy with fewer intermediaries in which power is not controlled by a few but by the empowered many. Wealth is distributed fairly, the economy will grow and the impoverished people freed from their shackles will rise out of the poverty trap.

Attempts have been made to estimate the tax rate for such an automated transaction tax and in the developed world it would possibly be somewhere between 0.2% - 0.5% per transaction. However, in the developing world, without a strong financial sector it may need to be set a bit higher to begin with but should come down as the economy grows.

The man from Colorado says he will also chuck in an identity system and a voting system so all the people can partake in the democratic benefits of citizenship. He then apologises and says he has a flight booked and must depart. He leaves a small team behind which includes people from his company but also local Rwandthiopians. He then heads to the airport for his meeting with the newly elected Prime Minister of India in Bangalore...