i'm surprised this thread hasn't gotten more attention.
your plan sounds quite reasonable to me, and i think the most unusual and interesting detail is that for once it seems to redistribute the balance of power and privilege rather more fairly between the copyright holders and the public. the attitude towards copyright by its holders seems to have evolved towards an idea that copyright is some sort of due, that they are entitled to, or a natural law, whereas it never was intended to be that ; it is a privilege, and was always intended to be a *temporary* privilege.
i would be a bit hesitant to allow a copyright to be maintained indefinitely (no limit) as long as the fees are paid, but then i suppose if the fees really do increase exponentially few authors would find this worth their while (i imagine Disney would pay millions to prevent that stupid rat from falling into the PD, i they can no longer bully the government into protecting it for them, but how many people have the financial ressources of disney ?) ; the danger of course is that just as lobbyists have managed to change the copyright law to benefit from it for longer and longer periods until now copyright is (practically speaking) almost eternal, under this system they would lobby to reduce the fees progressively, allowing them more and more control (again) for longer and longer periods and less and less money.
i listened to a speech given by the head of Sweden's PiratParti (yeah yeah yeah, calm down all you others) which was linked to in one of the neverending copyright / pirating threads around here. based on the comments in the thread, i'm pretty sure i was the only person besides the original poster to have done so, but he had some very very interesting things to say about the effects of copyright protection legislation on personal privacy, among other things, and i wish *everyone* would listen to his speech with an open mind. it's not about "despoiling artists simply because now with digital technology we easily can, and we're too cheap to pay for the media we want so we steal it" as is so often claimed. he advocated a return to the original spirit of copyright, so a fixed period of 7 or 14 years or so (i can't quite remember the details) from the date of publication, after which the work falls into the public domain, no extensions, no discussion.
i think some sort of compromise between your system and his system could be a really good system. "orphaned" works would no longer be a problem at all (that's a point of great irritation for me personally, since i've just been confronted with one), the public domain (and therefore our collective culture, which benefits EVERYONE) would be significantly and incessantly enriched, and the money collected as copyright fees could be used to subsidize more culture ; everyone wins.
i don't know who you should present this idea to (some governmental agency), but you should definitely present it to *someone*. maybe you could send a little email to the Swedish Pirat Party
EDIT : someone give this man some karma. i just tried to, but apparently i "have given out too much karma in the last 24 hours" and i'm all out.