I've tried to set up a system where tax avoidance is reduced or eliminated. Because the transaction system will reject transactions that don't pay the fee when they use their cash, they are stuck with the decision to participate in the system or not. Once the cash is in the system, they must pay the tax or the tax will be taken from them(using btc multi-sig where the decay charging authority is held accountable to only charge the fee on delinquent accounts.
N2 can certainly set up Nx and move all cash over there. Lets use a real example.
N1 spends $100 with N2. N2 wants to avoid the decay(but the system always charges at least one day of decay during a transaction) So they move the cash to Nx. The transaction occurs and $0.003 cents goes back to N1. Now the cash is in Nx. What are they going to do with it here. If they let it sit for 30 days they will be auto charged a decay fee of about $0.10. This flows to N2.
Even if N2 is proactive and sends it back to N3 immediately, $0.0000032 will flow back to N1. A small amount to be sure, but overtime these small amounts add up.
And if Nx uses the cash to develop something that brings in far more cash than went in, the amounts get much bigger.
That is besides the point because we want to avoid the situation entirely where N2 tries to devalue N1s benefits by passing to a shell corporation Nx
Nothing can keep someone from just passing cash and on and on and on to cash it owns except rule of law and accountability. Accountability can be observed in the blockchain and bad actors identified. Rule of law comes later. (I try to cover this in STH. Statutory Theft - https://github.com/skilesare/art_and_democratic_hypercapitalism/blob/master/the_pattern_language/sth_statutory_theft.md )
Re: Fees - I don't have a great solution to this other than offering miners a share of future pref payments for any mined items that they charge no fee for. This involves them taking risk, but also provides substantial long term rewards.
All of this goes much deeper than the original question which I think now is best framed as 'does having a backflow of cash based on amount spent enhance the information we can get out of an economic system over the standard capitalistic model of today.' If we add too many things in we end up in a conjecture bias situation.
Once I answer the first question in the affirmative, then I can move on to whether the implementations of the system are rational or not. If achieving the prior is a priority, there likely exists an implementation that can achieve it. At least I think.
(I try to cover this in STH. Statutory Theft - https://github.com/skilesare/art_and_democratic_hypercapitalism/blob/master/the_pattern_language/sth_statutory_theft.md )
You don't say anything about how is supposed to have the power to enforce that statute.
It's also not quite clear in what way having a shell corporation is illegal in your system. Even if you have a fixed rule that a single individual can only own a node, people can move money to their family.
...Even if N2 is proactive and sends it back to N3 immediately, $0.0000032 will flow back to N1.
This thread is for asking any questions that might seem obvious, tangential, silly or what-have-you. Don't be shy, everyone has holes in their knowledge, though the fewer and the smaller we can make them, the better.
Please be respectful of other people's admitting ignorance and don't mock them for it, as they're doing a noble thing.
To any future monthly posters of SQ threads, please remember to add the "stupid_questions" tag.