I have now managed to read all the comments here, and have realized some things that haven't been addressed.

First, there are going to be stages that the funding mechanism goes through, and this will necessitate that the funding mechanism(s) evolve over time to reflect not only the need to develop evolving, but what funding mechanisms evolve, how the community evolves, and more. There is an initial period, and then those things that come after. Initially the only reasonable funding mechanism is donations, as we have very little data to base other mechanisms on.

Second, funding from inflation is not ideal, and over the long term funding from donations will prove both inadequate (IMHO) and unwieldy, with too much need to promote fundraising. IRL promotions suck up as much as 90% of funds, with only what isn't spent to promote donating left to fund whatever is sought to be funded. This doesn't work IRL, and it won't work on Steem.

Third, neither proposed mechanism accurately reflects the reality of stake, and this prevents funding proportionately from the beneficiaries of the funding. VP is based on stake, and funding should be too. Just as unused VP fails to take advantage of inflation, so basing funding on inflation fails to base funding on the stake that will benefit from it.

The only reasonable source of funding for development that will benefit stakeholders is stake itself. Drawing funding from inflation will reduce incentive to create, curate, and witness, all negative impacts on the ability of the blockchain to grow and incentivize investment. Taxing stake itself proportionately funds development from those that will proportionately benefit from it. It motivates stakeholders to attend to ensuring funds are used efficiently, and prevents stake that is not used to benefit the community from receiving disproportionate benefits from funds spent on development, which all other funding mechanisms will do.

Only taxing stake directly will preclude increasing the financial incentive to do no creation, curation, or witnessing. Funding development via inflation directly does this.

Lastly, taxing stake directly provides certainty to investors. They will know that development is in their hands, and that will give them complete control of the potential gains their stake can realize. Since approving funding will be based on VP, which directly reflects stake, the stakeholders will control funding and the benefits of that funding will inure to them proportionately. Since they have authority for funding, they also have responsibility equally. No other mechanism fails to obscure that responsibility, and is directly proportional to the stake having authority to effect it.

Thanks!