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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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The median currency would have 1-2 market movers. In fact typical case would be “my mom bought all my tokens in exchange for indulgently priced better tokens”
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Replying to
You should read up on barter clubs, Wir Bank, and mutual credit clearing, you can do it loose (credit lines, reputation) hard (each unit is redeemable against a basket of goods, some of which members will tend to have in stock) or a mix. Can use decentralized ledgers like BTC's.