Section VI.C.1: Phasing out traditional sales taxes in favor of the new model

[Jatslo]

Blockchain at the Checkout: Reimagining Sales Tax with a 15% POS Model in 2025
The analysis evaluates the feasibility and implications of phasing out traditional U.S. sales taxes in favor of a blockchain-based 15% point-of-sale charge model funding universal dividends, contextualized by 2025’s economic, technological, and policy landscape:



Phasing Out Traditional Sales Taxes for a Blockchain-Based Future: A 2025 Perspective

Abstract

As of March 2025, rising economic inequality and technological advancements have reignited debates over U.S. tax structures, with proposals like the 15% point-of-sale (POS) charge model gaining traction. This analysis examines Section VI.C.1 of the proposed model—phasing out traditional sales taxes in favor of a blockchain-tracked POS charge funding universal dividends through the United States Permanent Dividend Fund. Drawing on Alaska’s Permanent Fund Dividend as a blueprint, the model leverages 2025’s blockchain scalability and digital payment innovations to address inefficiencies and regressive impacts of current sales taxes. Recent events, including post-2024 tax reform discussions, IRS digital asset reporting rules, and state-level blockchain experiments, underscore its timeliness. This study assesses the economic viability, technological readiness, and political feasibility of the transition, highlighting benefits like transparency and redistribution, alongside challenges such as cybersecurity risks, corporate resistance, and public perception. Grounded in contemporary trends, the analysis critiques the model’s potential to reshape consumption-based taxation while navigating legislative and societal hurdles. It concludes with a call for gradual, state-led pilots, offering a forward-looking perspective on how 2025’s convergence of policy and technology could redefine equitable wealth distribution in the U.S.

Sponsor: Electronics | Fashion & Apparel | Home & Garden | Collectibles & Art | Automotive Parts & Automotive Accessories | Toys & Hobbies | Health & Beauty | Sporting Goods | Jewelry & Watches | Antiques

Papers Primary Focus: Phasing Out Sales Taxes: Blockchain Feasibility in 2025

Thesis Statement: In 2025, phasing out traditional U.S. sales taxes in favor of a blockchain-based 15% point-of-sale charge model offers a technologically feasible and economically transformative approach to funding universal dividends, yet its success hinges on overcoming political resistance, ensuring corporate adoption, and leveraging recent advancements in digital infrastructure to address persistent inequality.

As of March 2025, the United States grapples with persistent economic inequality and an increasingly digital economy, setting the stage for bold proposals like the 15% point-of-sale charge model. This innovative framework, envisioned to replace traditional sales and property taxes, operates through a blockchain-tracked system that collects a 15% charge at every transaction, channeling the revenue into the United States Permanent Dividend Fund to provide universal dividends to all citizens. Inspired by Alaska’s Permanent Fund Dividend, which has long utilized oil revenues to distribute annual payments and maintain economic equity, this model scales the concept nationally with a modern technological twist. Its proponents argue that it could streamline taxation, enhance transparency, and redistribute wealth in a way that traditional systems have failed to achieve.

The relevance of this proposal in 2025 cannot be overstated. Following the 2024 elections, policy debates have intensified around tax reform and wealth distribution, with economic inequality reaching new heights as wages stagnate against rising costs. Simultaneously, blockchain technology has matured, offering decentralized, secure platforms that can handle vast transactional volumes—a critical advancement enabling such a radical shift in tax policy. From IRS rules on digital asset reporting to state-level blockchain experiments, the technological and political landscape of 2025 provides a unique window for reimagining fiscal systems. Against this backdrop, the objective of this analysis is clear: to dissect the feasibility and implications of phasing out traditional sales taxes in favor of this new model, anchoring the discussion in the latest events and trends shaping the nation’s economic future. By exploring its economic viability, technical readiness, and societal impact, this analysis seeks to illuminate both the promise and the pitfalls of this transformative idea.

To understand the stakes of phasing out traditional sales taxes in favor of the 15% point-of-sale charge model, it’s essential to first examine their role in the United States as of early 2025. Sales taxes remain a cornerstone of state and local revenue, with many regions heavily dependent on these funds to support public services like education and infrastructure. Data from early 2025 shows a patchwork of tax rates and collections, reflecting both regional economic disparities and a growing reliance on consumption-based levies. Yet, this system faces mounting economic pressures. Inflation adjustments, such as the IRS updates for 2025, have struggled to keep pace with rising living costs, while shifts in consumer spending—increasingly skewed toward online and digital purchases—complicate revenue stability. States like California and Texas, for instance, have seen fluctuating yields as physical retail declines, underscoring the fragility of this decades-old model in a rapidly evolving digital economy.

Recent events further expose the limitations of traditional sales taxes, painting a picture of a system ill-equipped for 2025’s realities. The regressive nature of these taxes has come under sharp scrutiny as costs soar and wages stagnate—a trend starkly evident in post-2024 economic data. Low- and middle-income households bear a disproportionate burden, spending a larger share of their income on taxable goods, while wealthier consumers, with more disposable income for nontaxable investments, skirt the same pressure. This inequity has fueled public discontent, amplified on platforms like X, where discussions of economic inequality dominate. Compounding this is the administrative inefficiency plaguing tax collection in a digital economy. The rise of e-commerce has outpaced regulatory frameworks, with states struggling to enforce taxes on cross-border online sales—a challenge highlighted by 2024’s record holiday shopping season. These shortcomings, rooted in an analog-era design, make the case for a radical rethink, setting the stage for the proposed blockchain-driven alternative that promises to address both equity and efficiency in one fell swoop.

At the heart of the proposed shift lies the 15% point-of-sale charge model, a system designed to overhaul traditional taxation by imposing a uniform 15% fee on every transaction, meticulously tracked via blockchain technology. This revenue feeds directly into the United States Permanent Dividend Fund, which then disburses universal dividends to every citizen, aiming to create a steady stream of income for all. The mechanics are straightforward yet ambitious: every purchase, whether a cup of coffee or a car, incurs the charge, and the decentralized ledger ensures every cent is accounted for, eliminating the patchwork of state-specific sales taxes. The model takes a page from Alaska’s Permanent Fund Dividend, a proven success story where oil revenues have funded annual payments to residents since the 1980s, fostering one of the most equitable economies in the nation. Scaling this to a national level, the proposal swaps oil for a broader consumption base, betting on the ubiquity of daily transactions to generate a sustainable revenue pool.

The technological backbone of this vision is blockchain, which, by 2025, has evolved significantly beyond its cryptocurrency origins. Advances in cross-chain functionality allow disparate blockchain networks to interoperate seamlessly, while improvements in scalability ensure the system can handle the millions of daily transactions across the U.S. without buckling. This isn’t just theoretical—2025 sees digital payment systems flourishing, with central bank digital currency (CBDC) pilots gaining traction globally and private sector tokenization trends turning assets into digital tradables. In the U.S., these developments align perfectly with the model’s needs, offering a ready-made infrastructure for integrating the POS charge into everyday commerce, from mobile apps to brick-and-mortar checkouts. The technology promises not just efficiency but also transparency, letting citizens see exactly where their money goes—a stark contrast to the opaque machinery of current tax systems.

Economically, the intent is as bold as the tech: to redistribute wealth and tackle economic inequality, a priority that’s only grown sharper in 2025’s policy landscape. By channeling funds into universal dividends, the model echoes the progressive tax reforms gaining steam post-2024, where the focus has shifted from punishing income to rebalancing consumption. Unlike traditional sales taxes that hit lower earners hardest, this approach offsets the charge with dividends, theoretically putting more money back into the pockets of those who need it most. It’s a direct response to the wage stagnation and cost-of-living crises dominating headlines, aiming to create a safety net that’s both universal and automatic. In a year marked by debates over fairness and fiscal innovation, this model positions itself as a radical yet practical fix, leveraging 2025’s appetite for change to rethink how the nation funds itself and its people.

The transition to the 15% point-of-sale charge model doesn’t exist in a vacuum; it’s shaped by a confluence of recent events that have primed 2025 as a pivotal year for such a shift. On the policy front, the aftermath of the 2024 elections has thrust tax reform into the spotlight, with proposals like Project 2025 advocating for a pivot to consumption taxes over traditional income-based systems. These discussions, while not identical to the POS model, signal a growing appetite for rethinking how America taxes its citizens, particularly as economic inequality remains a hot-button issue. Meanwhile, states like Wyoming are forging ahead with their own experiments, leveraging blockchain-friendly laws to test alternative tax models. Wyoming’s permissive stance on digital assets and decentralized systems offers a real-world proving ground, hinting at how a national rollout might take root in pockets of innovation before scaling up.

Technologically, 2025 marks a banner year for blockchain adoption, bolstering the feasibility of this new model. Corporations are increasingly embracing tokenization of assets, turning everything from real estate to intellectual property into digital, tradable units—a trend that dovetails with the POS charge’s need for a robust digital infrastructure. At the same time, government initiatives are keeping pace; the European Central Bank’s wholesale CBDC trials showcase how public sector adoption of digital currencies can work, offering lessons for U.S. policymakers. Closer to home, the IRS has rolled out Form 1099-DA in 2025, mandating detailed digital asset reporting that aligns seamlessly with blockchain’s promise of transparency. This regulatory shift not only normalizes digital transactions but also provides a framework for tracking the millions of POS charges the model envisions, bridging the gap between tech innovation and fiscal practicality.

Economically, the currents of 2025 are equally telling. Persistent inequality, laid bare in post-2024 data, has fueled a groundswell of support for universal income models, a sentiment echoing loudly across platforms like X. Citizens, frustrated by wage stagnation and rising costs, see mechanisms like universal dividends as a lifeline—a narrative that the POS model taps into directly. In parallel, the retail sector is undergoing its own transformation, with the rapid growth of digital POS systems enabling real-time tax collection. From contactless payments to integrated e-commerce platforms, these tools are already reshaping how transactions occur, making the leap to a blockchain-tracked charge less a futuristic fantasy and more an extension of current trends. Together, these policy, technological, and economic developments of 2025 create a fertile landscape for the proposed transition, offering both momentum and a roadmap for turning vision into reality.

Assessing the feasibility of phasing out traditional sales taxes in favor of the 15% point-of-sale charge model begins with its economic viability, a critical litmus test for any tax overhaul. As of early 2025, sales taxes generate substantial revenue for states and localities, with yields varying widely based on regional consumption patterns and tax rates. The proposed model aims to replace this with projected income from a uniform 15% POS charge, applied universally across all transactions. Preliminary estimates suggest that, given the sheer volume of daily purchases nationwide, this could match or exceed current sales tax hauls—potentially surpassing them in high-consumption states like California or Texas. However, the impact on state budgets looms large; states accustomed to setting their own rates might balk at a standardized system, and the shift would demand unprecedented federal coordination to manage the United States Permanent Dividend Fund and ensure equitable revenue distribution. This tension between local control and national ambition could either bolster or derail the model’s economic promise.

Technologically, the readiness of blockchain infrastructure as of March 2025 offers a strong foundation—but not without caveats. Advances in transaction speed and scalability have made blockchain capable of processing millions of POS charges daily, while enhanced security measures—like zero-knowledge proofs—protect against fraud, a necessity for a system handling such vast digital transactions. Yet, capacity is only half the battle. Adoption hurdles loom large, as both corporations and consumers must buy into this seismic shift. Retail giants, already adapting to digital POS systems, might resist additional costs or complexity, while everyday shoppers could chafe at a visible 15% charge, even with the offset of universal dividends. Bridging this gap requires not just technical prowess but also a massive education campaign, a challenge that 2025’s tech infrastructure alone can’t solve.

Politically and socially, the model’s fate hinges on a delicate balance of acceptance and resistance. Post-2024, public perception has tilted toward an appetite for radical tax reform, driven by frustration over economic inequality and stagnant wages—sentiments vivid on X and in grassroots movements. The promise of universal dividends as a tangible return could sweeten the deal, aligning with 2025’s push for progressive solutions. Yet, resistance persists. Congressional gridlock, a perennial hurdle, threatens to stall any nationwide overhaul, especially one requiring federal oversight of a blockchain-based fund. Meanwhile, state autonomy concerns amplify the friction; governors and legislatures protective of their taxing powers might view this as an overreach, sparking legal or political pushback. Feasibility, then, rests on navigating this trifecta—economic potential, technological readiness, and social-political buy-in—each a steep hill to climb in the fractious landscape of 2025 America.

The implications of adopting the 15% point-of-sale charge model ripple far beyond its immediate mechanics, starting with its potential for economic redistribution. By funneling revenue into universal dividends, the model could meaningfully reduce economic inequality, a promise backed by Alaska’s experience as a compelling case study. Since the 1980s, Alaska’s Permanent Fund Dividend has distributed oil revenues to residents, shrinking income gaps and proving that broad-based payouts can stabilize a population’s financial footing. Scaled nationally, this approach might similarly lift lower-income households, countering the regressive sting of traditional sales taxes. Yet, risks lurk beneath the surface. Inflationary pressure could emerge if businesses pass the 15% charge onto prices, squeezing consumer spending power despite the dividend offset—a delicate balance that could either amplify or undermine the model’s egalitarian aims, depending on how 2025’s economy responds.

Administratively, the shift promises a leap in efficiency, pitting blockchain’s transparency against the convoluted machinery of traditional tax systems. With every transaction logged on a decentralized ledger, the model eliminates the labyrinth of state-by-state rates and exemptions, offering taxpayers a clear view of where their money flows—an appealing upgrade in an era of distrust. However, this clarity comes with a catch. Cybersecurity risks, underscored by high-profile digital asset breaches in 2025, cast a shadow over blockchain’s reliability. A single vulnerability—whether a hack or a smart contract flaw—could compromise billions in revenue, eroding public faith and exposing the system to chaos. This tension between streamlined administration and digital fragility will define whether the model can deliver on its promise or falter under 2025’s tech realities.

Looking long-term, the societal impact of this shift could reshape America’s economic and cultural fabric. By leaning into a consumption-based economy, the model aligns with global trends like the EU’s MiCA framework, which regulates digital assets to prioritize transactional clarity—a sign that 2025’s world is tilting toward such systems. This could position the U.S. as a leader in modern fiscal design, harmonizing with international peers. Yet, the deeper challenge lies in cultural adaptation. A nation bred on rugged individualism might resist a dividend-driven income model, viewing it as a handout rather than a right, even as universal dividends aim to reframe wealth as a shared resource. Over decades, this could nudge societal norms toward collective stability, but only if 2025’s early adopters—policymakers, businesses, and citizens—embrace the shift rather than recoil from its unfamiliar contours. The implications, then, are as much about identity as they are about economics.

Even as the 15% point-of-sale charge model offers a tantalizing vision, its path is strewn with challenges and counterarguments that could stall its ascent. Implementation risks loom large, starting with technical hurdles that dominate 2025’s blockchain discourse. While scalability has improved, skeptics point to lingering bottlenecks—can the system truly handle America’s transactional load without lag or collapse? Energy consumption debates further muddy the waters; blockchain’s carbon footprint, a hot topic in 2025’s climate-conscious climate, could clash with green policy goals, drawing ire from environmentalists. Economically, the model threatens disruption beyond theory. Retail sectors, already battered by digital shifts, might crumble under new compliance burdens, while property tax-dependent locales—think school districts or small towns—face a revenue void that universal dividends may not quickly fill. These risks paint a picture of a system teetering between innovation and instability.

Equity concerns add another layer of contention. The universality of dividends sparks fierce debate in 2025’s policy circles—why give payouts to the wealthy when targeted welfare could laser-focus on the needy? Critics, echoing post-2024 critiques on X, argue that a one-size-fits-all approach dilutes impact, leaving low-income consumers still squeezed by the 15% charge. Even with dividend offsets, the math doesn’t always favor those living paycheck to paycheck; a flat charge on essentials like groceries could outpace their dividend gains, deepening rather than easing economic inequality. This paradox—promising equity yet risking regressive echoes—fuels a counterargument that the model’s heart may not match its outcomes, challenging its moral footing in a year obsessed with fairness.

Opposition, meanwhile, coalesces into a formidable wall. Traditional tax advocates, wedded to the familiarity of sales and property taxes, decry the loss of state control, a sentiment shared by state governments loath to cede fiscal reins to a federal blockchain-driven fund. Governors and treasurers, protective of their budgets, might rally against this perceived overreach, framing it as a power grab dressed up as progress. On the corporate front, pushback simmers over enforcement costs. Big retailers and small businesses alike balk at retrofitting POS systems or absorbing the 15% charge’s administrative weight—costs that could either eat profits or hike prices, alienating customers. This chorus of resistance, from entrenched bureaucrats to profit-minded CEOs, underscores a truth: the model’s boldness invites as much defiance as it does hope, testing its mettle in 2025’s fractious arena.

Bringing this analysis full circle, the prospect of phasing out traditional sales taxes for the 15% point-of-sale charge model hinges on a delicate interplay of 2025’s defining forces. Recent policy shifts, like post-2024 election tax reform debates and Wyoming’s blockchain experiments, signal a readiness for change, emboldening the model’s case with political momentum. Technologically, 2025’s blockchain adoption—from corporate tokenization to IRS digital asset reporting—lays a sturdy foundation, proving the system’s capacity to handle a national overhaul. Yet, the economy tells a dual tale: while persistent inequality and retail’s digital pivot fuel demand for universal dividends, risks like inflation and state budget disruptions pose real threats. This synthesis reveals a model buoyed by innovation but battered by practical and political headwinds, a tension that 2025’s unique landscape both nurtures and tests.

Given these dynamics, a measured recommendation emerges: a gradual pilot approach, starting with state-level trials, offers the wisest path forward. Leveraging 2025’s blockchain maturity, states like Wyoming or tech-savvy California could test the POS charge, refining its mechanics—say, tweaking the 15% rate or bolstering cybersecurity—before a national leap. This staged rollout sidesteps the chaos of instant upheaval, easing corporations and consumers into the shift while giving policymakers data to silence skeptics. It’s a pragmatic bridge between vision and reality, harnessing tech infrastructure without igniting a full-scale political pushback. Success here could build the case, state by state, for broader adoption.

Looking to the horizon, the model’s future glimmers with possibility as digital assets and tax policy converge by 2030. If pilots prove viable, the POS charge could evolve—perhaps integrating with a central bank digital currency or refining dividend distribution via AI-driven analytics—into a cornerstone of a reimagined fiscal system. Global trends, like the EU’s MiCA framework, suggest a world tilting toward digital, consumption-driven economies, and the U.S. could lead this charge. Yet, its evolution hinges on 2025’s early steps; a misstep now could doom it to a footnote, while steady progress might redefine how wealth flows in America by decade’s end. The phase-out, then, is less a conclusion than a beginning—an experiment poised to shape the economic future if it can weather today’s storms.

Note. The aim of the analysis is to assess the practicality and potential impact of replacing traditional U.S. sales taxes with a blockchain-based 15% point-of-sale charge model, as proposed in Section VI.C.1, using 2025’s technological and policy developments as a backdrop. The goal is to provide a critical evaluation of its economic, technical, and social feasibility while proposing a pathway for implementation amidst current trends and challenges. The recommended Citation: Section VI.C.1: Phasing out traditional sales taxes in favor of the new model - URL: https://algorithm.xiimm.net/phpbb/viewtopic.php?p=15586#p15586. Collaborations on the aforementioned text are ongoing and accessible here, as well.