Tax should move from a national level to a local level

Posted by BitDirect on April 24, 2023

An interesting use case for the BitDirect platform could be for a group of private investors who would like to set up their own smart city. They could find a location that is close to resources or has appealing characteristics that potential city or town dwellers would be interested in.

The “City Owners” could set themselves up as advisors on the BitDirect platform and add any new potential inhabitants as clients. They could then require each inhabitant to deposit a specified amount of bitcoin into the multisignature wallet to live in the town or city. The “City Owners” could add a requirement that a certain percentage of the bitcoin in the multisignature wallet be deducted for expenses related to living in the city.

The City Owners would then offer various traditional city services funded by the levy charged to each inhabitant. This could allow for a multitude of these types of cities to be built, all with the most innovative infrastructure available. Competition would result between these cities, where certain cities might offer free healthcare, and others might offer free transportation.

Inhabitants would be able to evaluate each city on its own merits and be free to move between each city with the best offering. There could be a scenario where cities are tailored to each demographic, depending on what stage of life they are at. As your circumstances change, like having children compared to a fresh graduate or an elderly person, you could change cities to fit your changing requirements.

Cities for the Elderly might have free healthcare, while younger cities might have more of a focus on restaurants, bars, and coffee shops.

People could open a “menu” of potentially thousands of cities worldwide and decide where they want to live based on the deposit, annual levy, and services on offer. There might be quite a transient existence where younger people could choose to live in 2 or 3 cities in one year, while the older population might be more sedentary.

The advantage of this model is that the principal amount deposited to live in the city is transparent to all parties, and the inhabitant remains in control of their funds should they decide to move. It is assumed that bitcoin will increase in value over time, and in response, the City Owners might decide to reduce the deposit amount or the annual levy. Inhabitants would still get the value of the price appreciation of their bitcoin deposit.

Globally, there is an overwhelming feeling that taxpayers are not receiving nearly enough benefit from government for the tax they pay. Bitcoin’s main characteristic is decentralization, and it is felt that how tax revenue is spent should also be attributed to the localities where the tax is paid. People want to see more value in their neighborhoods and their own lives, rather than costly bureaucratic government programs that are hugely wasteful.

The profit-driven nature of the city will result in cities becoming far more efficient. Monopolistic tendencies where City Owners hike prices and exploit inhabitants won’t exist due to competition from neighboring cities. People have the freedom to move if they do not like the pricing or services on offer.

The past decades have resulted in mass-migration of people from rural areas into cities. Cities and their surrounding areas need to evolve to consider the quasi-remote working culture, where people might need to visit major hubs on a far more sporadic basis.