~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ SANDY SANDFORT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C'punks, On Tue, 30 Jul 1996 ichudov@algebra.com asked:
...how can the government TECHNICALLY collect taxes...when transfers of money are protected by strong crypto[?]
Igor answered his own question with regard to trying to tax digital money transactions at the bank level:
Of course these banks may be offshore, and then such collection becomes problemstic.
He then suggested:
Another alternative that I see is property taxes and poll taxes or taxes on some commodities such as oil. But incomes seem to be hard to track.
Under a totally anonymous digital money scheme, directly tracking income becomes effectively impossible. One solution that is used in countries with historically low rates of tax compliance (e.g., France) is to base taxation on apparent wealth. Not very efficient. Commodity taxes--especially taxes on only one or a few commodities--create market distortions as people seek to minimize their tax load by commodity substitution (e.g., natural gas or ethenol for oil) or the use of black market sources (e.g., bootleg cigarettes.) Poll taxes are universally hated and trivially avoided. Their evil twin, head taxes, are likewise hated and only enforceable with mandatory universal identification. (In two months, the Mafia will be selling perfect forgeries supplied by the ChiComs.) If I were the government, I'd tax realty as my primary or only source of income. It *appears* "progressive" so it appeals to the lower class, but it is passed along to everyone in the form of higher commodity prices and rents. Realty can't be picked up and moved to another jurisdiction like personal property or people, so it is easier to hold as a tax hostage by government. S a n d y ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~