Our current tax base will soon be obsolete. It needs to be replaced by taxation of our new collaborative capabilities.
During the Agricultural Age, tax was based on a share of the crops. When the Third Revolution came – which would eventually lead to the Industrial Revolution, a new value system was created that soon dwarfed Agricultural value: Industry. The governments which had relied since centuries on agricultural tax became weaker and weaker. They had to get money lent to them by the new ‘bourgeois’, who created value by trade or industry. The system became less and less stable as the traditional governing elite became relatively poorer and poorer, as industrial value increased orders of magnitude above agricultural value.
Today in developed countries, agriculture represents 2 to 3% of the GDP. Even if it was taxed entirely it would not represent much of the 30-50% which is swallowed by taxes and social security payments!
Today, we are again in the same situation. Our tax system is mostly based on Industrial Age value. A new value production system has been created with the Fourth Revolution that is expanding and that will eventually dwarf the Industrial Age value. The only way to get out of this conundrum is to change our tax base to effectively tax the Collaborative Age value! This is going to be difficult immediately because our accounting systems which date from the Industrial Age do not account for it.
The Agricultural Age example also reminds us that tax is not necessarily only money, it can also be in kind, including the time of people doing certain activities for the public good.
The solution is thus not to increase tax the Industrial Age way. It is to create new ways of deriving a share of the tremendous value created by collaboration for the public good. Because collaborative value is not linked to geography, countries will find it difficult to create such new taxes on their own. The solution needs to be internationally agreed. But that is the only possible way forward to avoid our governments to become relatively poorer and poorer.
The challenge is huge but so important for the stability of our societies that it should be taken upfront. Do you have ideas on the matter?
