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In a fucked-up, heavily distorted way, full of self-congratulation and self-dealing, this is what conservatives and libertarians try to do. The imagine themselves to obviously be "essential" workers in wealth creation even if participation is via 3 degrees of tenuous separation
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For the sake of argument, imagine that all wealth is created by selfless academic scientists making new discoveries, with their students going out and building startups based on those discoveries, invested in by VCs, in turn invested in by LPs.
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In this cartoon wealth pipeline, the scientists would be paid tax-free NSF money just to exist, their students would enjoy low tax rates for building startups, the VCs would pay a slightly higher tax rate, and the LPs higher than that. We're talking net income tax rate here.
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Past LPs, the case that you're "participating in wealth creation" becomes very tenuous indeed. You're at best just not getting in its way. If you're not adding *information bits* to *equity dollars*, you're not helping. You may not be hurting, but you're not helping.
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The basic principle is: if you're helping make money smarter, you get lower taxes. If you're keeping it constant smart or making it dumber, you get higher taxes.
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Somebody, not-me, should write a book about all money as equity invested in future ideas/individuality, as a counterpoint to Graeber's model of all money as debt held in a history of obligations/mutuality.
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The cartoon pipeline is a cartoon because it doesn't work as advertised. Distortion and capture every step of the way.
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Replying to @vgr
Isn't this the current US system? NSF exists (though with income and institutional taxes), startups don't pay taxes until profit, VCs get tax free carried interest, etc., and I think it depends on the LPs what taxes they get, though that's likely closer to VC level.
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I think the big missing piece that could make debt less toxic is being able to choose much more meaningfully who you get indebted to. Every individual/group being able to designate debt in their own currency tokens would be a step in that direction. Decouple globally a bit.
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You kick the global coupling up a level to a much more fine-grained currency market, with much less exposure on the management or mismanagement of the dollar, but higher exposure to smaller-scale bad behavior.
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If instead of a few hundred national currencies and $ as the denoting default, you had millions or billions of currencies, almost all of it backed by small/local patterns of debt holding, what would happen? Like in crypto markets most tokens would have effectively no liquidity.
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Replying to
This was the original idea for Ripple: a decentralized credit network. I spent a decent portion of the financial crisis involved in the open source project that predated the current Ripple company, and the social challenges loom even larger than the substantial technical issues.
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