Work-In-Kind Taxation

What if instead of handing over your hard earned cash to Uncle Sam each year, you could pay your taxes with labor?

The government would post work that needs to be done and citizens could opt into doing that work for a market competitive standardized wage which is credited against their tax bill. For example, if a school required a new playground, they could post a weekend-long job commitment requiring a supervising licensed contractor to act as foreman, equipment operators, and unskilled manual laborers. Citizens with the appropriate qualifications including licenses, experience, and reputation could sign up for the jobs as a means of paying taxes. Such a system would empower people to better their communities directly, allow a greater percentage of people to be net contributors to society, and reduce inequality. A fully automated and transparent system for doing this could be developed and implemented using technologies available today.

Fighting Inequality with Work-In-Kind Taxation

To illustrate how work-in-kind could fight inequality, consider the case of Mr. Moneybags and Miss Down-On-Luck. For simplicity, say they are each taxed at 10%. Miss Down-On-Luck makes $20,000 a year and has to stretch every penny to make ends meet. Paying the $2,000 she owes in taxes would mean going hungry or missing rent. Lucky for Miss Down-On-Luck, the Bad-Side Township she lives in has plenty of work-in-kind to be done. Miss Down-On-Luck logs hours of labor picking up litter, shelving books in the library, and painting over graffiti until she has contributed $2,000 worth of her time. Over the years, Miss Down-On-Luck develops a good reputation for her work and gains community trust. This qualifies her to do work-in-kind in higher-paying community roles such as leading community clean-up events and working as an assistant librarian. Bad-Side Township benefits hugely from Miss Down-On-Luck’s efforts, becoming a better place to live for its working-class residents. Miss Down-On-Luck also gains from the exchange, acquiring skills and references that help her career. In addition to better monetary prospects, Miss Down-On-Luck develops a sense of pride in her community and strong relationships with her neighbors.

Meanwhile, Mr. Moneybags is a CEO living in Paradise City making $20 million a year. Not thrilled about giving $2 million to Uncle Sam, Mr. Moneybags would also like to use his labor to pay his taxes. Unfortunately for Mr. Moneybags, CEO hourly rate does not have a wage determination by the Bureau of Labor, who can only make those determinations for more easily standardized work with a very large labor pool such as masonry work or equipment operation. Without any projects offering the over $8,000 an hour compensation he is accustomed to, Mr. Moneybags is forced to fork over the lion share of his tax contribution in cash. These funds are used for defense, infrastructure, and other government services benefiting both Paradise City and Bad-Side Township.

The Tech Behind the Tax System

By traditional methods, implementing this work-in-kind program would add mind-numbing amounts of bureaucracy and all the corruption, inefficiency, and tone-deaf policies that come along with them. Enter the blockchain to save the day. The technologies needed to synthesize a fully transparent, decentralized, secure, incorruptible, system that connects work-in-kind opportunities to qualified citizens and compensates contributors fairly with taxation credit exist today. Below are the features required for such a system with the tech present t system that connects work-in-kind opportunities to qualified citizens and compensates contributors fairly with taxation credit exist today. Below are the features required for such a system with the tech present today making them possible.

Project Listings and Coordination - The government would need a system for listing projects that need to be completed and the jobs associated that people may browse and register for work through. Urban Array is developing a blockchain application, Social Enterprise Application Management Systems (SEAMS), that does just that. SEAMS would function as the umbrella application, pulling together the features listed below into a comprehensive system cryptographically secured over a decentralized network.

Digital Identities - To automate the signup process, each citizen would need a digital identity on the blockchain under their control from which they could signup for available work-in-kind opportunities. Democracy.earth has developed a blockchain, Sovereign, capable of creating a secure, individually controlled, verifiable identity.

Standardized and Verifiable Worker Qualifications - Many of the positions available for work-in-kind tax credits will require particular skills or experience. An automated system capable of verifying that a person signing up for work-in-kind has the required qualifications. Qualifications could be recorded within the Sovereign blockchain through the use of its built in organization feature. For example, engineer qualifications could be recorded on the Sovereign blockchain as follows. The National Society of Professional Engineers, who currently licenses engineers, would establish itself as an Organization on the blockchain using a smart contract as their charter. They can then grant memberships in accordance with their charter that can be used to prove that someone has passed the requisite tests to become a licensed Professional Engineer. the allows a blockchain entity to issue badges to members according to policies set forth in a smart contract Constitution.

Abuse Reporting and Investigation System - A smart contract could be built using Ethereum or another blockchain that automatically opens an investigation inquiry with a corresponding work-in-kind job listing when a complaint is registered against someone using the blockchain.