Taxes on property and necessities are likely to go up dramatically around the world as governments compensate for their inability to tax internet transactions.
This was the prediction from Lord William Rees-Mogg to Saturday Star/Magnus Heystek Investments/First National Bank Investors Club members in Johannesburg recently.
Rees-Mogg, an economics forecaster who has held several senior positions in the British media, recently published a book, The Sovereign Individual, in which he focuses on the mass information age.
He said that cumbersome government bureaucracies, which swallow "up to half a country's money", would go into decline early in the next century as businesses, even smaller ones, become more international and take advantage of offshore tax breaks.
"We don't believe large national bureaucracies can continue. The revenue of governments will decline quite dramatically early into the next century. We believe the information age will come more quickly than people initially supposed. There is already a massive increase in the use of information technology and the internet."
Rees-Mogg said encryption techniques would make government regulation increasingly difficult and that "governments don't like it ... already the American government makes it difficult for people to send messages that they can't read.
"Governments will be in a position where they don't know who is sending a message to who, or whether something's taxable inside their borders or another land. Large areas will become untaxable. Property tax is likely to go up because you can't move property over the internet. Necessities will be taxed more.
"Governments will see that they also have to spend less. They will have to downsize in the way that industry has."