A new money and taxation era

When world-wide competition in making the standard kit of consumer goods — for those who can afford them — forces profits margins down to 2% and below, it will be insufficient to complete the money cycle — personal earnings -> discretionary savings -> funding for the next wave of production — and for all the financial bodies and intermediaries to take their cut, not to mention governmental depredations at one or two stages along the way.

In short, the mass production era will be coming to an end. There are signs of this already in the increasing short-run and customised production of goods for the rich. More significant, though, both for the rich and for the general public is the increasing proportion of discretionary income being spent on personal services such as education for one’s children and health care for oneself.

Instead of the profit-driven society — enabled by business — which we are now leaving, we are gradually becoming a fee-driven one in which business profits will play a decreasing part. The money cycle will have to be quite different. Funding for basic research in individualized learning and health care can only come from government and, in turn, directly from taxpayers.

Because returns from funding in the above human sciences might be very long term — 20 to 80 years perhaps? — compared with those during the mass production era — typically 5 to 20 years — and incalculable anyway, then personal taxation is going to have to be rigorously applied and, on order to be seen to be fair, transparent.

As most peoplo spend he maximum they can afford on status goods which other people can view then taxing the value of status goods such as housing or cars, etc is fair. Even the rich won’t mind being taxed in this way. But this tax might be best left for spending on infrastructure. Taxation for scientific research funding can be based on one’s relative status within one’s specialization group — that is, on fees earned.

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