It sounds like you would make everyone into a merit source with an unlimited amount of smerits and I don't think that would work. On top of that, anything based on ranks is doomed to fail. Ranks don't make the person or their judgement any more valuable.

That's without even going into the pitfalls of negative merits/downvoting. This has been discussed a lot, particularly at the start of the merit system, and I don't recall any particularly robust abuse-proof ideas on how to implement it.