Jonny Mack pfp
Jonny Mack
@nonlinear.eth
what are the downsides of voluntary taxation (https://en.wikipedia.org/wiki/Voluntary_taxation)? what would happen to a polity that used it as the sole form of capital allocation?
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Connor McCormick ☀️ pfp
Connor McCormick ☀️
@nor
tragedy of the commons
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Jonny Mack pfp
Jonny Mack
@nonlinear.eth
this is the biggest downside i see. worth asking: would whatever “tragedies” that occurred in this system still be better than the alternatives we observe today with compulsory payments?
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Connor McCormick ☀️ pfp
Connor McCormick ☀️
@nor
we raise taxes to address externalities so whatever you think private industry can't profitably address (public goods or public bads) you're gonna have problems
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Jonny Mack pfp
Jonny Mack
@nonlinear.eth
what about communities, who have skin in the game, acting in their own self interest?
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Connor McCormick ☀️ pfp
Connor McCormick ☀️
@nor
This image does a good job https://i.imgur.com/n9Pcbcr.png
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Jonny Mack pfp
Jonny Mack
@nonlinear.eth
not sure i follow. source with more context?
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Connor McCormick ☀️ pfp
Connor McCormick ☀️
@nor
It's a bit hard to convey. Essentially, tragedy of the commons is the biggest downside because it's the only downside. Voluntary taxation isn't taxation, it's investment, people do it because they want the upside and because the upside accrues uniquely to them
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Connor McCormick ☀️ pfp
Connor McCormick ☀️
@nor
Now, it might benefit their community, too. But the only reason for them to do it is because some sort of return accrues to them in exchange for their willingness to be taxed (think about libraries at universities named after big donors, those are voluntary taxes)
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Connor McCormick ☀️ pfp
Connor McCormick ☀️
@nor
In all the mechanisms we currently know, there will always be domains where the upside of taxation to the community collectively is insufficiently captured by the upside of submitting to voluntary taxation individually. This is identical to saying, "there are valuable goods that are unprofitable to produce"
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Jonny Mack pfp
Jonny Mack
@nonlinear.eth
1) how do large scale oss projects fit into this model? don't they prove it wrong, or at least incomplete? 2) are you assuming all market participants behave in their own economic self interest 100% of the time? if so, is that true? 3) how do the downsides you’ve identified compare to the downsides of compulsory taxe
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Connor McCormick ☀️ pfp
Connor McCormick ☀️
@nor
2) I'm saying incentives drive behavior. looking good is as much (or more) an incentive as making money so "I donated to this open source project I now feel good" is compatible with this view. It's also the source of externalities as EA tries to point out
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