The best solution to that is to establish corporate taxes like what our government did. That way there will be balance in the three sectors that have been mentioned.
But the problem arise when corporations don't declare their income well but at least they pay tax.
No, that is the worst solution possible, the corporations will just move to another country. What you suggest will just escalate what I just described.
Taxes need to be lowered, for everyone. And regulations need to be reduced for everyone. This way the consumer can spend, and small businesses could reappear.
Escalating this bullshit is just kicking the can down the road,
you don't build a forest by cutting down big trees, but by letting small trees grow.Best solution or not I believe that Xester 'solution' is what we are going to see happen going forward. I think I wrote up-thread somewhere how I believe it will play out. Here it is.
Government response to this is will not be to let the system collapse but instead to "put down more concrete". As earnings are eroded governments will simply move on a worldwide basis to supplement the incomes of the newly impoverished masses via redistribution and welfare programs. A small part of this redistribution will occur in the form of significantly higher taxes. However, the lions share will come from increased government debt.
As governments become insolvent they will find markets unwilling to service debt in their home currencies and will be forced to transition their debt to a supranational one (probably SDR's). This will be the only way to continue supportive handouts to dependent populations. Think Greece but on a global scale. Going forward this scenario would result not in immediate catastrophic collapse but rather a slow progressive grind with individual countries going into crisis at different times while being forced to surrender sovereignty.
I believe we are witnessing the gradual but inevitable death of nationalism and the modern nation state.
I expect that the rich will be increasingly unable to escape taxation going forward. The wealthy will be tracked and taxed while safe havens and tax shelters are increasingly shut down.
Millionaires will be hit hard and even the billionaires take a small hit. As national sovereignty is ceded there will increasingly be no place for them to go.
This will only stall potential collapse. Down the road we will find ourselves with a massive and inefficient global welfare state that is stagnate and in constant danger of failure. At this point humanity will desperately need a paradigm shift. I believe the knowledge age as outlined by Anonymint in the OP represents such a shift.
My expectation and hope is that the the current system will survive long enough for the knowledge age to really take off and simply grow us out of the morass. As more people transition themselves from the welfare state to the knowledge age the risk of collapse will decline as the overall size and cost of the welfare state declines to an insignificant portion of the economy.
The trend towards future population reduction is already well underway. It seems likely that further population reduction will occur spontaneously as a byproduct of the status quo.
http://www.economist.com/news/21589151-crashing-fertility-will-transform-asian-family-baby-boom-bust
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Wealth will increasingly seek to hide by moving into tax havens in other countries. It will also be increasingly hunted. Pressure applied in the name of shutting down tax havens will be one more tool to drive political consolidation and weaken the nation state. Those running from the tax man will increasingly be identified, caught and punished. Options for legal evasion like you mentioned above will be shut down or restricted to a even narrower elite.
Tax havens that survive will likely be rare and limited to select jurisdictions where citizenship is hard to obtain. These areas are likely to be funded by income taxes (there will likely be no escape for wage earners anywhere) In these havens citizens will likely be exempt from inheritance, capital gains, and wealth taxes. This will allow the billionaire class to safely run their interests from afar.
The lesser wealthy will be increasingly consumed via taxation in their home nations. The coming wave of socialism and public anger will drive most of them back into the ranks of government dependents. This will serve the purpose of sating public rage, destroying potential local opposition, and further undermining the economics of nation states thus increasing the dependence on debt that will soon be issued by bodies and governed by laws under the jurisdiction of those same tax havens.
Rather then spontaneous collapse. I believe the proper model is that of controlled demolition.
RealBitcoin I agree with your critiques of our current economic system. However, our current economic trajectory appears to me to be fixed something to be survived rather then changed.
