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The Automated Revenue Service

Keywords

war-on-disease, 1-percent-treaty, medical-research, public-health, peace-dividend, decentralized-trials, dfda, dih, victory-bonds, health-economics, cost-benefit-analysis, clinical-trials, drug-development, regulatory-reform, military-spending, peace-economics, decentralized-governance, wishocracy, blockchain-governance, impact-investing

74,000 pages of tax code replaced by six lines of code. The IRS employs 83,000 humans to do what a smart contract does automatically.

74,000 pages of tax code replaced by six lines of code. The IRS employs 83,000 humans to do what a smart contract does automatically.

74,000 Pages of Instructions for Giving Money to the Government

Your tax system has 74,000 pages of rules. To put that in perspective, the entire Harry Potter series is 4,224 pages. Your tax code is 17.5 Harry Potters long. Except Harry Potter has a coherent plot and your tax code has loopholes.

The Internal Revenue Service employs about 95,000 humans to interpret these rules167. It costs $12.3 billion per year to operate. Americans spend an additional 7 billion hours per year filling out forms168. An entire profession (“accountant”) exists solely to decode rules that your government wrote for itself.

On my planet, when a system requires 95,000 interpreters, we don’t hire more interpreters. We rewrite the system. Your species hired the interpreters. Then you hired people to interpret the interpreters. Then you wrote 74,000 pages of instructions for the interpreters of the interpreters. At no point did anyone suggest starting over. This is called “institutional momentum,” which is what happens when the cure for a bad idea is more of the bad idea.

The Replacement

function _update(address from, address to, uint256 value) internal override {
    if (from == address(0) || to == address(0) || taxExempt[from]) {
        super._update(from, to, value);
        return;
    }
    uint256 taxAmount = (value * taxRateBps) / 10_000;  // 0.5% of every transfer
    super._update(from, treasury, taxAmount);            // Tax goes to treasury
    super._update(from, to, value - taxAmount);          // Rest goes to recipient
}

Six lines. Every transfer automatically deducts 0.5% and sends it to the treasury. No filing. No forms. No audits. No compliance departments. No offshore accounts. No accountants. The tax is unavoidable because it IS the protocol.

You cannot lobby a smart contract. You cannot offshore a protocol. Every loophole in your 74,000 pages exists because someone paid a lobbyist to put it there. The replacement has no lobbyists because there is nothing to lobby.

The Numbers

Your current system costs $12.3 billion in direct IRS budget, plus $546 billion (95% CI: $450 billion-$650 billion) per year once you price the 7 billion hours of paperwork at what the humans doing it could have earned instead168. Not taxes. Paperwork about taxes.

The replacement is not free, and I will not insult you by pretending it is. Budget $2 billion a year: servers, engineers, security auditors, and the people who watch the people who watch the code. That figure is padded to roughly ten times any sane engineering estimate for running payment rails at national scale, and it is still one-sixth of the IRS’s current operating budget. The compliance burden it deletes is several hundred times larger. The savings could fund a small country. Or, more usefully, clinical trials.

Why You Haven’t Done This

The 74,000 pages are not a bug. Every page represents a negotiation between a lobbyist and a legislator. Every loophole is a feature, purchased and maintained by someone who benefits from it. Your tax system is not complicated because taxation is complicated. Your tax system is complicated because complexity is profitable for the people who write the rules.

95,000 IRS employees interpreting 74,000 pages to do what six lines of code does automatically. And you wonder where your taxes go.