A portion of the Demurrage is allocated to a tax. This amount is determined by:

  1. The issuer by requiring a tax

  2. The citizen by electing a tax

  3. The legal entity by electing a tax

Some elective taxes may be required by rule of law. For instance, the state of Texas may require an entity to elect a tax to operate in the state.

The percentages of tax are removed from the Demurrage amount before the pref payments are sent out.

For example:

US Tax: 15%

Texas Tax: 8%

Houston Tax: 1.5%

Dock Workers Union: 0.1%

Total tax: 24.6%

Demurrage Amount for 1 year: $1000

Tax: $246

To Pref Payments: $754

These amounts are transferred to the state accounts as pref payments which the state can retrieve with a catch up if the state account is not vetoted.

What about tax on state accounts? Tax on state accounts is removed from the money supply. This is how our form of money naturally degrades.

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