How Blockchain Can Make Governments And Taxes More Efficient And Transparent

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Politicians in the state of Washington in the US have been trying to introduce income tax for a while now. Previous attempts have failed due to a legal precedent set by the State Supreme Court almost a century ago and income tax seems to violate Washington State Constitution. State Senator Bob Hasegawa is pushing forward another attempt in bringing income tax to the state. State and city taxes are separate from federal taxes. There are already so many taxes people pay: federal income tax, property tax, sales tax, business tax, capital gains tax, payroll tax, social security and medicare tax, etc. And there are more hidden taxes like fuel tax that is included in the price of the gas.

Taxes are normally percentage based and are not fixed amounts. This, population growth, and income increases with economic growth over the years all combined together would also mean government entities would be receiving more and more in taxes over the years. Now my question is, why do you need to increase taxes, or invent and introduce new taxes? With lack of transparency in how government conducts its business and how these tax funds are used should make anybody be concerned about the efficient use of these public funds.

All states have different taxes. Some like Oregon have income tax but no sales tax. Some like Washington have no income tax but there is sales tax. And most have combination of both taxes. I am not completely against taxes. I believe taxes do have purpose and can be put into a good use. What I question is the mismanagement of funds, wasteful spending, corrupt dealings, and never ending greed for more taxes. One simple truth about taxes is that, once one is introduced at a lower rater which may be very small at the beginning, it is almost guaranteed next step politicians take is to increase these taxes. That to me is a deception tactics. How can one trust after such manipulative lies that end up not even contribute to anything positive to the local communities and society.

Perhaps I am exaggerating a bit. Taxes can be used for useful and necessary things, and they can contribute to the positive growth of the local, state level, and national economies and the lifestyles of ordinary people. More transparency and accountability is needed, which in return may make use of these public funds more efficient and productive. As bitcoin is improving the money and making it much more efficient using this great technology knows as blockchain, the same technology can bring transparency and efficiency to the government entities.

Politicians might not been too eager and excited to get into blockchain and study its possible implementations in the government and society. But if or when they do, they may find that it can offer great deal of value and benefits for the governments and its agencies. The first rule of economics is to achieve the best possible outcome with the limited resources. I believe blockchain can help doing just that for the government entities while making them more transparent, trustworthy, and more respected.

State of Washington is home for many big companies who are leaders in their areas. Microsoft, Boeing, Amazon, Tableau, Zillow, Starbucks, Expedia, Costco, and many more very successful companies with global recognition call Washington State home. Not only successful businesses contribute to the local economies, but they also present a unique opportunity for local politicians. Imagine having access to the greatest talents these companies have brought together, and access to resources, connections and logistics these companies built. But this requires honest and diplomatic approach in establishing public and business partnerships to find solutions to problems and contribute to further developments and improvements.

Transparency and accountability are key for success here. Blockchain can help with that. Not any kind of blockchain, but decentralized and secure blockchain. Without decentralized system, blockchain cannot be secure, immutable, reliable and won't be able to provide transparency.

To make this happen, research would need to be conducted to determine what kind of blockchain can be suitable for the government operations. Most of the government data are available for public. It is just not that easy to get access to them. Everything that is already required by law to be available for all public, can be stored in the blockchain. Some data that may not be available for public at the certain time but will become public documents at some point can be stored in an encrypted format with certain permissions to agencies that can view the data and oversight entities for accountability.

Having government's daily work, documents, transactions, expenses, revenues stored in the blockchain makes them automatically available to the public, unless they are encrypted for classified categories. Since open source attracts voluntarism, there will be individual citizens, groups, or organizations that will build tools to create reports of what government does and how they spend public funds and these reports would be available to public through mainstream and/or independent media. And all of the information will be easily verifiable because they are all in the blockchain.

While adding transparency to government activities, this will also remove or reduce unnecessary bureaucracy. People will be able to transact with the government via blockchain. For example, if I need to renew the vehicle registration, I will be able to pay and request new registration using the blockchain. They would be able to verify all of the data in the blockchain automatically and make the process faster without any intermediary agencies. All of government business will become much more efficient all of the sudden.

Of course this will require some initial investment to build proper software for use by government workers and training them how to use. If done right this software wouldn't any different than what they already use today, maybe better. This transition does not have to be quick. It can be achieved step by step, connecting one agency or department after another. Most people using the software or website will not even notice the difference that they are interacting on the blockchain. But they will know everything is on the blockchain if there is a need to look up the old transactions or verify the information.

This will improve inter-agency and inter-department transactions and dealings as well. If something is not being done on time, timestamp will hold them accountable. With this newfound transparency, governments will earn more trust and respect from the public. This will encourage public voluntarism to help make things better. This may also increase donations for various causes if there is a need. At this point government will be able to make a stronger case if they still need more taxes, because their reasons will be based on verifiable facts.

Perhaps, it is too early for blockchain implementation by the governments. Only because the move slowly. Technology is already here and ready for use. I wouldn't be surprised if any government showed interest and asked for help, there will be altruistic minded talents who would offer their help or services to make something like this a reality.

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