Commutalism

A Third Economic Path

Commutalism is an experimental economic system based on a simple principle: the price paid for a good must reflect the real payment capacity of the buyer. Between capitalism — where everyone pays the same price regardless of their means — and communism — where the state sets prices uniformly — it proposes a third path based on progressivity and commercial viability.

The reference is not the absolute income but the regional median income (INSEE data). Someone earning the median pays a price close to the displayed price. Below the median, they receive a reduction; above it, they contribute more. The adjustment is progressive through an asymmetric power law that distinguishes the situation below the median (β↓) from that above (β↑), creating significant gaps at the extremes while remaining moderate at intermediate levels.

An affordability correction mechanism ensures that a good already out of reach at the base price never generates an additional surcharge — the system then tends towards a reduction, regardless of the buyer's income position.

"From each according to their capacity, to each according to their means."

−60 % max. reduction (necessity)

+700 % max. surcharge (ultimate luxury)

≈ 1,0 index at median income

Capitalism, Commutalism, Communism

Capitalism

One price for all. The wealthy buy easily; modest earners go into debt or go without. Companies maximise profit; access inequalities are structural.

Efficiency and innovation stimulated
Market equilibrium pricing
Glaring access inequalities
Exclusion of low incomes

Price adjusted to each buyer's income. The more affluent contribute more; the less well-off pay less. Redistribution is assured through prices, not through taxation: VAT and compulsory levies are replaced by a flat 10% rate on all incomes.

Wider access to essential goods
Commercial viability preserved
Radically simplified taxation
Implementation complexity for pricing
Fiscal transition undefined

Communism

Prices set and subsidised by the state. Formal equality of access, but frequent shortages, no incentive to produce quality goods, and an inefficient economy.

Formal equality of access
Essential goods guaranteed
Shortages and queues
Little incentive for innovation

The four guiding principles

1

Commercial viability

The seller always receives at least the floor price — a guaranteed percentage of the base price. For a necessity this floor is 40 %, for an ultimate luxury 90 %. No good can be undercut to the point of threatening the survival of the company that produces or sells it.

2

Asymmetric non-linear progressivity

The adjustment follows an asymmetric power law (ratio^β) with two distinct exponents: β↓ for incomes below the median, β↑ for those above. This asymmetry creates stronger reductions on necessities for low incomes, and increasing progressivity on luxury for high incomes.

3

Guardrails by good type

The luxury factor adapts the bounds to the product type. A private jet remains expensive even for someone on a low income (floor at 90 % of base price); a loaf of bread can never cost more than double for a billionaire (ceiling at 200 %). The parameters β↓, β↑, floor and ceiling depend only on the luxury factor.

4

Affordability correction

A good whose base price already exceeds the individual's purchasing capacity — measured by a threshold of salary months specific to the good type — never generates a surcharge. The system then tends towards the floor, protecting struggling buyers from a punitive effect on purchases already out of reach.

The fiscal foundation: a single levy

Abolition of VAT and compulsory levies

Commutalism assumes a complete overhaul of the tax system. VAT, social contributions, income tax and all compulsory levies are abolished and replaced by a single 10% levy on all annual income — wages, dividends, capital gains, business profits, rental income, royalties. The tax base is maximally broad so as to keep the rate as low as possible.

An integrated poverty protection fully exempts incomes below the poverty threshold (50% of the national median, i.e. ≈ €1,073/month). Between this threshold and the median income (€2,147/month), the rate rises progressively from 0 to 10%. Only above the median does the 10% rate apply in full.

VAT is replaced by a 5% levy on company turnover. About 60% is passed on in prices (≈ 3% effective for consumers), and the remaining 40% feeds a regional equalisation fund. Social progressivity is ensured through income-adjusted prices, not through taxation.

10 % rate above median income

0 % effective rate below poverty threshold (≤ €1,073/month)

0 other compulsory levy retained

0%

Poverty protection

Incomes below the poverty threshold (≤ €1,073/month) are fully exempt. No levy, no procedure — the exemption is automatic.

↗

Progressive rise to the median

Between €1,073 and €2,147/month (national median), the rate rises linearly from 0 to 10%. At exactly the median, one pays exactly 10% — no more, no less.

10%

Full rate above the median

Above €2,147/month, the 10% rate applies to all income: wages, dividends, capital gains, rent, royalties — without exception or allowance.

5%

Redistributive levy on businesses

VAT is abolished and replaced by a 5% levy on company turnover. About 60% is passed on in prices (≈ 3% for consumers); the remaining 40% feeds a regional equalisation fund.

Redistribution flow

5% CA
Business levy

60% → Prices
≈ 3% consumer

40% → Equal. fund
Disadvantaged areas

→ See the response to the geographic flaw

IS

Corporate profits

Corporate income tax is abolished. Distributed or reinvested profits are taxed when they become income for an individual, not at the entity level.

∑

Universal tax base

Rental income, royalties, gains, monetary inheritances — every incoming cash flow is taxed at the same rate, regardless of source or recipient status.

Note — This tax system is not intended to fund public services in the traditional sense: within the commutalist framework, collective services (health, education, infrastructure) would also be subject to progressive income-based pricing, eliminating the need for fiscal redistribution. This is an experimental model whose macroeconomic implications (total revenues, funding of social protection, transition) remain to be evaluated.

The mathematical formula

Central formula

price paid = price_base × index

index = clamp( r_eff^β, floor, ceiling )

r_eff = min( r_median, r_comfort ) β = β↓ if r_eff < 1, else β↑

if r_median > 1 and r_eff < 1 ⇒ r_eff = 1 (above the median: never a reduction)

r_median = income / income_median r_comfort = income × N / price_base

Parameters based on luxury factor f ∈ [0, 1]

β↓ = 0.50 − 0.30 × f: Exponent applied when income is below the median (r_eff < 1). Higher for necessities — low incomes benefit from stronger reductions on essential goods. From 0.50 (necessity) to 0.20 (ultimate luxury).
β↑ = 0.05 + 0.40 × f: Exponent applied when income is above the median (r_eff ≥ 1). Higher for luxury — high incomes contribute significantly more on luxury than on necessities. From 0.05 (necessity) to 0.45 (ultimate luxury).
floor = 0.40 + 0.50 × f: Minimum index guaranteed to the seller. From 40% (necessity) to 90% (ultimate luxury) of base price.
ceiling = 2.00 + 6.00 × f: Maximum index applicable to the buyer. From 200% (necessity) to 800% (ultimate luxury) of base price.
N = 3.0 + 9.0 × f: Comfort threshold in months of income. From 3 months (necessity) to 12 months (ultimate luxury). Used to assess whether a good is accessible at the base price for the given income.

Index interpretation

↓

index < 1 — Reduced price Income below median. The buyer pays less than the base price.

↔

index ≈ 1 — Standard price Income close to median. The buyer pays approximately the displayed price.

↑

index > 1 — Increased price Income above median. The buyer contributes beyond the base price.

Adjustment curve visualisation

Correction index as a function of monthly net income, for five good types. Reference median: €2,147/month Observatoire des inégalités, 2023. The affordability correction is not shown here — it depends on the base price and is illustrated in the example below.

Min income: Max income: Min index: ×0,3 Max index: ×8,5

Left of median (vertical grey line): index is below 1, price is reduced. Right: index exceeds 1, price is increased. The horizontal plateaus correspond to the floors and ceilings specific to each good type. The horizontal dotted line marks the neutral index (×1). The slope breaks at the median reflect the change of β (β↓ below median, β↑ above).

β evolution by luxury factor

The two exponents β↓ and β↑ evolve in opposite directions with the luxury factor. For a necessity, β↓ is high (strong reductions for low incomes) while β↑ is low (high incomes pay only a modest surcharge). For ultimate luxury, the reverse applies. The two curves cross around f ≈ 0.64.

β↓ decreases from 0.50 to 0.20 as f goes from 0 to 1: progressivity for low incomes is more pronounced on necessities than on luxury. β↑ increases from 0.05 to 0.45: progressivity for high incomes is much stronger on luxury.

The luxury factor in detail

The luxury factor is the only good-dependent parameter — it entirely modulates β↓, β↑, floor, ceiling and N. A pure necessity (bread, medicine) and an absolute luxury (private jet) obey different rules.

Luxury factor	Good type	β↓	β↑	Floor	Ceiling	N (months)	Examples
0,00	Pure necessity	0,50	0,05	40 %	200 %	3,0	Food, pharmacy, energy
0,20	Low everyday good	0,44	0,13	50 %	320 %	4,8	Everyday clothing
0,35	High everyday good	0,40	0,19	57,5 %	410 %	6,2	Leisure, restaurants
0,50	Semi-luxury	0,35	0,25	65 %	500 %	7,5	Consumer electronics
0,60	Value product	0,32	0,29	70 %	560 %	8,4	Car, equipment
0,75	Luxury	0,28	0,35	77,5 %	650 %	9,75	Luxury fashion, watches, jewellery
0,85	High luxury	0,25	0,39	82,5 %	710 %	10,65	Luxury car
1,00	Ultimate luxury	0,20	0,45	90 %	800 %	12,0	Private jet, yacht, luxury property

β is asymmetric: β↓ decreases with luxury (low incomes benefit from stronger reductions on necessities), while β↑ increases with luxury (high incomes contribute more on luxury goods). Between an income at 2× and 10× the median, the price gap is +8% for a necessity (β↑=0.05) and +106% for an ultimate luxury (β↑=0.45), before ceiling.

The affordability correction

Without correction, the basic formula would apply a surcharge to anyone earning more than the median, even if the good represents several years of income. This mechanism would penalise someone earning €4,000/month wishing to buy a watch at €192,000 — the base price alone already represents 48 months' salary — with a +43% surcharge. The correction eliminates this surcharge: since this buyer is above the median, r_eff is capped at 1 — they pay the base price, with no discount and no surcharge.

Step A — Comfort threshold N = 3 + 9 × factor_luxury

Number of months of income deemed "reasonable" for this type of purchase: 3 months for a necessity, 12 months for an absolute luxury.

Step B — Comfort ratio r_comfort = income × N / price_base

If r_comfort < 1, the good costs more than N months of salary — it is out of reach at the base price. If r_comfort ≥ 1, it is accessible.

Step C — Effective ratio r_eff = min(r_median, r_comfort)

The minimum of the two ratios is retained. When r_comfort < r_median, the index is pulled towards the floor rather than towards a surcharge.

Example — Watch at €192,000 (luxury factor = 0.75), income €4,000/month, median €2,000

N = 3 + 9 × 0,75 = 9,75 months

r_median = 4 000 / 2 000 = 2,00

r_comfort = (4 000 × 9,75) / 192 000 = 0,203 → good out of reach

r_eff raw = min(2,00 ; 0,203) = 0,203 — but r_median = 2,00 > 1 and r_eff < 1

r_eff corrected = 1,000 — protection: above the median, never a reduction

index = clamp(1,000^β↑, 0,775, 6,50) = clamp(1,000^0,51, 0,775, 6,50) = 1,000

Price paid = 192 000 × 1,000 = 192 000 € (0 % — base price)

Detailed step-by-step example

Example data

Product Value product (e.g. car)

Base price 25 000 €

Luxury factor 0,60

Buyer's income 4 000 €/month

Regional median income 2 000 €/month

1

Calculate parameters for luxury factor (0.60)

β↓       = 0,50 − 0,30 × 0,60 = 0,32  (below the median)
β↑       = 0,05 + 0,40 × 0,60 = 0,29  (above the median)
floor = 0,40 + 0,50 × 0,60 = 0,70  →  70 % of the base priceceiling  = 2,00 + 6,00 × 0,60 = 5,60  → 560 % of the base price

These values define the bounds and intensity of progressivity. The asymmetry of β reflects the fact that progressivity is stronger downward (for necessities) than upward.

2

Calculate the income / median ratio

r_median = 4 000 / 2 000 = 2,00

The buyer earns 2× the regional median. Without the affordability correction, this would be the ratio used directly in the power law — leading to a +22.2% surcharge.

3

Evaluate good affordability

N           = 3,0 + 9,0 × 0,60 = 8,4 months
r_comfort  = (4 000 × 8,4) / 25 000 = 33 600 / 25 000 = 1,344

The car costs 25,000 / 4,000 = 6.25 months of salary, below the threshold N = 8.4 months. The good is therefore accessible (r_comfort > 1). However, r_comfort = 1.344 remains below r_median = 2.00: the correction still comes into play to moderate the surcharge.

4

Select the effective ratio

r_eff = min(r_median, r_comfort) = min(2,00 ; 1,344) = 1,344

The correction is active: the retained ratio is 1.344 rather than 2.00. This reduces the surcharge because the power law acts on a ratio closer to 1.

5

Apply the power law

r_eff^β↑ = 1,344^0,29 ≈ 1,090  (r_eff = 1,344 ≥ 1, so we use β↑ = 0,29)

This is the raw index before bounds. The power law creates gentle progressivity: someone earning 2× the median does not pay 2× the price — they pay about 9% more (without correction, they would have paid 22% more).

6

Apply the bounds

index = clamp(1,090 ; 0,70 ; 5,60) = 1,090

The index 1.090 is between the floor (0.70) and the ceiling (5.60). No bound is reached for this profile.

7

Calculate the final price

price paid = 25 000 × 1,090 = 27 250 €  (+9,0 %)

Without the affordability correction, this buyer would have paid 25,000 × 2.00^0.29 = 25,000 × 1.222 = €30,550 (+22.2%). The correction saves them €3,300 by capping the progressivity at the actual affordability of the good.

Comparative grid — Value product at €25,000

Luxury factor = 0.60 · Regional median = €2,000/month · β↓ = 0.32 · β↑ = 0.29 · Floor 70% · Ceiling 560%

Income profile	Monthly income	r_median	r_eff (with correction)	Index	Price paid	Variation
No income / RSA	350 €	0,175	0,118 floor	0,700	17 500 €	−30,0 %
Precarious	800 €	0,400	0,269 floor	0,700	17 500 €	−30,0 %
Low income	1 400 €	0,700	0,470	0,786	19 650 €	−21,4 %
Median (reference)	2 000 €	1,000	0,672	0,881	22 025 €	−11,9 %
Upper-middle (example)	4 000 €	2,000	1,344	1,090	27 250 €	+9,0 %
Comfortable	8 000 €	4,000	2,688	1,332	33 300 €	+33,2 %
Well-off	20 000 €	10,000	6,720	1,738	43 450 €	+73,8 %
Very high income	100 000 €	50,000	33,600	2,771	69 275 €	+177,1 %

The affordability correction is active for all profiles here because the base price (€25,000) exceeds N × median income = 8.4 × €2,000 = €16,800. The two most modest profiles (welfare and precarious) reach the floor (70%). An ultra-wealthy person pays 2.77× the base price, i.e. €69,275 — the company realises significant margin on these sales, balancing the reductions granted to low incomes.

Price paid by income profile — €25,000 base price

Concrete visualisation of amounts paid by each profile for a value product (f = 0.60) at €25,000 base price, with a regional median of €2,000/month. The reference line indicates the base price.

In green: profiles paying less than the base price. In orange-red: profiles paying more. The company compensates reductions granted to low incomes through surcharges applied to high incomes.

Median incomes by region

Commutalism uses the regional median income as reference. These geographical disparities are significant: the median in Île-de-France is almost 5 times higher than that of Mayotte. INSEE — Median available incomes per consumption unit, 2021

In green: regions whose median exceeds the 2021 national median (€1,933). In blue: metropolitan regions below this median. In orange: overseas regions. All data comes from the same source and the same year. INSEE — Median available incomes per CU, 2021

A European Vocation

Commutalism is designed to apply primarily to the Eurozone. This delimitation is not arbitrary: the system rests on a set of institutional, technical and political prerequisites that are, as things stand, only met within the Economic and Monetary Union.

①

A digitalised and transparent system

An individualised price requires robust digital infrastructure: automated reading of declared income, real-time invoicing and transaction traceability. The European Union already has a regulatory foundation (GDPR, PSD2, eIDAS digital identity) that makes this transparency conceivable at scale.

€

A single currency

The formula calculates a price index from income expressed in a common currency. The euro eliminates exchange rate distortions and ensures that the reference median remains comparable across countries. Outside the Eurozone, exchange rate fluctuations and differences in nominal price levels would irreparably compromise the fairness of the system.

★

Political will and cooperation with the market

Simultaneously reforming taxation and pricing structure requires supranational political authority with sufficient legitimacy to coordinate member states, legislate on corporate obligations and guarantee a gradual transition. The ECB, the European Commission and the European Parliament together constitute an institutional framework uniquely suited to steering such a reform in good faith with markets and their stakeholders.

These conditions are not currently met in other economic zones, which does not exclude a future extension to other monetary unions or to any state possessing equivalent structures.

Foreign Visitors and Non-Residents

The Eurozone welcomes tens of millions of visitors each year whose income is declared abroad and denominated in another currency. These situations call for specific solutions, proportionate to the length of stay and the institutional framework of the country of origin.

Treatment by visitor situation

Situation	Recommended solution	Default index	Privacy protection
EU resident outside the Eurozone (short visit)	EUDI credential (DAC exchange between member states)	Index of country of residence	ZKP + VC BBS+
Non-EU tourist with Schengen visa	Income + wealth declaration on visa → index credential	PPP median index of country of origin	Consular TEE + anonymous VC
Non-EU visa-exempt tourist (ETIAS)	Income + wealth declaration via ETIAS → credential	PPP median index of country of origin	TEE + selective-disclosure VC
Non-EU long-stay resident (> 90 days)	Annual local declaration → credential update	Index declared at entry (visa)	Local EUDI wallet
No declaration / no agreement	Index = 1.0 — base price (neither reduction nor surcharge)	—	—

Three cryptographic techniques to protect privacy

A visitor's index must be presentable at checkout without revealing their exact income or enabling purchase tracking across merchants. The following three complementary protocols guarantee this protection.

TEE

Secure enclaves (TEE)

The declared gross income is processed exclusively within a Trusted Execution Environment (Intel SGX / AMD SEV) at the embassy or consulate. The enclave computes the PPP index and issues the signed credential. The gross income is destroyed immediately after computation — inaccessible afterwards, even to the operator.

VC
BBS+

Selective-disclosure verifiable credentials (W3C VC + BBS+)

The issued credential contains only the index, expiry date and issuer signature. Each checkout presentation generates a single-use proof (BBS+ unlinkable presentation): two purchases at two different merchants cannot be linked to the same person.

ZKP

Zero-knowledge proofs (ZKP — Bulletproofs)

For maximum confidentiality, a ZKP allows the visitor to prove that "my index is in band [a, b]" without revealing the exact value. The merchant applies the upper bound of the band. This mechanism is standardised via W3C VC ZKP profiles.

These mechanisms rely on open standards already being deployed in Europe (eIDAS 2.0 / EUDI wallet, 2026) and on mature ZKP algorithms available in open-source libraries.

See detailed technical prerequisites →

Limitations and practical considerations

Income verification

The system assumes that the declared income is truthful. Without a certification mechanism (tax authority, employer), a buyer could under-declare to pay less. Integration with tax data would be necessary in practice.

Individualised prices

In a traditional market, each buyer pays a different price for the same good. This requires an individualised invoicing system and social acceptance of transparency — or confidentiality — of adjusted prices.

Income vs. wealth

The formula is based on monthly income, not wealth. A retired person owning a Parisian apartment but with a low pension would benefit from a reduction not necessarily justified by their actual situation.

→ Our response

Experimental model

Commutalism is an exercise in economic reflection, not an implemented system. The numerical values (β↓, β↑, floor, ceiling, N) are reasoned but arbitrary proposals, to be refined through experimentation and debate.

→ Our response

All objections and responses →