Borrowing Money from Tax Accounts

In current regimes, people apply to lenders for loans. Lenders operate according to different principles and judge according to a variety of prejudices and values. As a result each individual is charged differently for borrowing money according to the choices available to him or her. Further, as more currency is printed, it becomes increasingly more difficult to pay off the loan. All lenders profit from loans and charge interest according to their risk. Hence, borrowers are favoured according to who is deemed to be the trust worthiest.

Borrowers, who are high-risk because of location or status are considerably inhibited from accessing loans. Hence, people become subject to desperate situations whereby they are rapidly exploited.

However, in a Creatocracy every account holder is entitled to borrow money according to their requirements and to set limits. Account holders can then borrow money without having to gain permission or negotiate terms. Terms and conditions are fixed according to the type of accounts held, and according to the accountholder´s history. All borrowing is done from a special Tax Account, and everyone has one!

All personal account holders within the Creatocracy hold at least two accounts; one is the Tax Account, where all borrowing takes place. This account is not subject to interest or inflationary pressures. For example, the Creatolla´s that are borrowed are later paid back at the same value. hence it does not "cost" the borrower additional energy. Personal accountholders also have a Current Account.

Tax Accounts

The Tax Account is borrowed from to pay for essential requirements. As account holders utilise essential providers (such as health, education, police, conflict resolution etc.) their tax accounts incur debt accordingly. As the Tax Accounts transition from overdrawn to holding capital via tax on earnings, the credit is later used for pension requirements. If the Tax Account is overdrawn, it is subject to a weekly borrowing limit. There are three forms of deductions possible from the Tax Account:

Personal Tax

The Personal Tax is for essential service providers such as health, education, conflict resolution etc. As people utilise these services their accounts incur debts. This is called the Personal Tax.

Collective Tax

The Collective Tax is similar to the Personal Tax but it differs because it allows access to services which are not necessarily regularly utilised. It consists of a general deduction which is levied upon all tax accounts according to the shared services opted into by that member. It goes towards collective needs and ambitions, which could range from prisons, entertainment projects, insurance plans, even moving mountains.

Members opt into Collective Finance Councils (CFCs) that offer access to projects that they do not always utilise, but which as a community they all need (such as prisons). The members who support the CFCs decide upon joining fees for new members which would come out of their Tax Account. Fees will be established for partial usage of selective projects. Members that wish to completely change CFCs take with them their accrued Collective Tax debt, which was spent by their former CFC, and which they approved. Members can also "part-opt" into other CFCs to obtain access to specific services.

Development Tax

The Development Tax is allocated by the personal preference of the tax holder towards causes that they deem worthy. The tax-holders accounts would be charged accordingly, with the funds going to their worthy cause. For example, say a minority group wanted to open a school for other minorities, and wanted to raise capital. If they could not get support of the wider community, they would then directly campaign to other minority taxpayers for support with the project.

Current Accounts

All members of the Creatobank also hold a Current Account, which reflects their current position and status, and is used for miscellaneous purchases and for general living costs. When accountholders change circumstances their type of Current Account changes. Their requirement to pay back any borrowed Creatolla or start saving a pension also changes. Reflecting their new status. Some examples follow.

  • Children / young adults (CYA Account)

  • Students (STU Account)

  • Employed people in the general sector (EGS Account)

  • Employed people in the essential sector (EES Account)

  • Self employed people (SEP Account)

  • Pensioners without savings (PWS Account)

  • Pensioners with Creatolla´s (currency) (PWC Account)

  • Disabled Persons (DIS Account)

  • Unemployed people who decline offers of work (UDO Account)

  • Unemployed people without offers of work (UWO Account)

  • Carers (CAR Account)

Benefit Payments

If peoples´ circumstances leed to their running out of money in their Current Account, they change their type of Current Account to reflect their new situation. There are a number of benefit bearing accounts:

  • Children / young adults (CYA Account)

  • Students (STU Account)

  • Pensioners without savings (PWS Account)

  • Disabled Persons (DIS Account)

  • Unemployed people who decline offers of work (UDO Account)

  • Unemployed people without offers of work (UWO Account)

  • Carers (CAR Account)

If the amount of money in these Current Accounts falls below the limit deemed necessary to attain a reasonable living standard (by the collective society), and no new income is being earned, the accountholders automatically receive benefits. Benefits are borrowed from the Tax Accounts and paid into their benefit bearing Current Accounts. Effectively, providing social benefits to the poor automatically without them requiring permission from a central body. Thus nobody is forced into exploitation or falls through the net of the Creatocracy (which happens all to often in Demonocracies).

Earning Money

When accountholders earn Creatolla´s, or are employed, their Current Account type, changes to reflect their new position E.g.:

  • Employed people in the general sector (EGS Account)

  • Employed people in the essential sector (EES Account)

  • Self employed people (SEP Account)

When assets accumulate in these Current Accounts and when certain thresholds passed, the account automatically begins to payoff the overdraft in their Tax Account.

When tax duty and borrowings have paid off the loans in the Tax Accounts, people are no longer overdrawn. Then their tax on earnings automatically begins to build for pension requirements. As such the more Creatolla they accumulate the better off they will be in retirement.

Pensioners With Creatolla´s

When pensioners with savings reach a time where they would like to stop working and live off their pension savings (stored in their Tax Account) they change the nature of their current account such as EES, EGS or SEP into a PWC Account. Then the assets from the Tax Account are transferred into the PWC Account. They then draw from these savings, which were accumulated in the Tax Account. However, responsibility is forced upon the PWC accountholders, if the Creatolla they hold falls below a level deemed necessary to support themselves, in accordance with their age and expected requirements, their PWC account status changes to a PWS account. Those that spend hard and fast would quickly loose the buffer that they had accrued and return to the PWS status.

Pensioners Without Savings

In a situation where the remaining money of a retired pensoner falls below the threshold necessary to support themselves, the Current Account automatically changes into a PWS account. Remaining Creatolla´s in the Current Account will be reserved for any ongoing pension benefit payments.