truthcoin and the end of the nation state

[zack]

We wont pay taxes much longer.

I know several dozen people who will honestly tell me whether they filed taxes, and facts about how they filed in the last few years.
With this information, I could train an oracle to report on facts about arbitrary people's taxes.
Once such an oracle exists, it becomes possible to offer a new type of insurance.
People who don't like taxes would buy this insurance. To continue getting coverage, they have to reduce how much taxes they pay.
If the IRS tries to punish them for refusing to pay enough, then the insurance will cover the cost.

Once we train an oracle to report on who the IRS is punishing, then this insurance can be 100% on the blockchain, There will be no central authority who could turn it off.
Anonymous traders will offer insurance coverage because they expect to make a profit.

[sflicht]

Interesting; a tax-focused, decentralized version of Charles Murray's vision in his most recent book (http://www.amazon.com/gp/product/B00N6PBGM2/ref=dp-kindle-redirect?ie=UTF8&btkr=1), where he calls for something similar (non-profit, crowd-sourced legal defense funds to protect people who wish to engage in civil disobedience against bureaucratic regulatory overreach).

Of course, you must beware that the IRS has the power not only to fine you and make you pay back taxes, but also to throw you in jail. I can imagine that if someone is unlucky enough to get audited, and then grudgingly pays the taxes and fines (covered by your postulated insurance contract), he or she is more likely to be audited next year. The market might adjust by charging such a person a higher premium, but I suspect it would quickly become more cost effective to just pay the taxes.

[zack]

This doesn't work at all. The IRS would just look at the public blockchain and audit everyone who purchased insurance.