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Tax-paying for Fun and Profit

Robert Kunstadt and Ilaria Maggioni

MPRA Paper from University Library of Munich, Germany

Abstract: Modern advances give us the ability to re-engineer the taxation system to benefit from computerized automation and the insights of modern psychology. People like to do things that bring a tangible reward. Tax-paying should be made FUN, not a chore. You will want to participate if you perceive a direct benefit. This new model selectively adapts the old English system of raising money by granting royal monopolies. A tax-paying entity would be allowed to make a bid on the percentage of tax it would pay for acquiring monopoly rights on a particular venture, posted publicly on a government-auction website for others to see and to post their alternative bids. Proposals put out for bid could immediately be tested for market viability by getting a thumbs-up/thumbs-down from the general public. The rewards to the proposer and to the public can be immediately perceived by all. Hence, the conditions for a positive stimulus-response-reward loop are fulfilled. Tax-paying becomes both fun and profitable, even more gratifying than betting in Las Vegas, because the bidder gets a perceptible benefit from it right away. The advantage to the state and its citizens is that monopoly efficiency does not just serve the monopolist but also the public. The would-be monopolist must make a precise calculation of how much to offer the state in taxes; upon pain of losing the auction to a competitor. With minimal government intervention, the “invisible hand” of economic theory is put to the task of serving the public good. (Journal of Economic Literature (JEL) Classification: H2 - Taxation, Subsidies, and Revenue; H21 - Efficiency; Optimal Taxation; H25 - Business Taxes and Subsidies; H27 - Other Sources of Revenue)

Keywords: Revenue; Efficiency; Optimal Taxation; Business Taxes; Sources of Revenue; Monopoly; Bid; Bidding; Internet; Automation; Auction; Competition (search for similar items in EconPapers)
JEL-codes: H2 H21 H25 H27 (search for similar items in EconPapers)
Date: 2013-05-12
New Economics Papers: this item is included in nep-acc, nep-pbe and nep-pub
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