[Hnrobert42]

Transaction taxes are considered regressive. That is, they disproportionately affect the poor.

The idea is that everyone must spend a certain amount of money to live. For the poor, that amount is a greater proportion of their total income and wealth.

Basically, a wealthy person can choose to pay the same taxes as a poor person by only spending as much as a poor person.

Maybe that's fair. Maybe it's not. But it is a criticism of sales/transaction taxes.

[adrianwaj]

That's true, the only thing I can think of is an "amplification curve" being set on whatever is paid, and that can be paid by everyone after any given period based on all the flows a person was involved in during that time.

So if a frugal rich person can be paying a similar amount to a poor person in overall tax looking at living expenses alone, one can also look at all the extra income the rich person gets from assets.

So this inequality/imbalance can be lessened through an amplification factor: by looking at the overall position of a person's flows.

The governments can decide how much to "squash down" down the inequality in society.

Would this address the issue raised?

The other thing interesting about a transaction tax is that individuals don't necessarily even need to be identified - only flows. That would suit the privacy-side of crypto. But I'm not sure how the final setup would look. And that could appeal to the super-rich who want to remain anonymous.

Maybe what I'm getting at is a blockchain tax: a proportion of transaction fees gets automatically routed to government coffers. Alternatively, add a staking tax as well.

This will all make more sense when more real-world assets go on-chain.