Igor Chudov @ home wrote:
Hi
Suppose that digital cash becomes easy enough to use and becomes the mainstream medium in most [or at least many] economic transactions.
The question is, how can the government TECHNICALLY collect taxes? I do not mean to start `libertarianism vs. socialism' discussion, I am more interested in the technical aspects of tax collection when transfers of money are protected by strong crypto..
Let's say, maybe this tax would work: every time someone verifies that a piece of digital cash is valid, s/he has to pay the government a little percentage of the amount. Since digital banks are easier to control than other participants of the market, this kind of tax legislation is easier to enforce.
Of course these banks may be offshore, and then such collection becomes problemstic.
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.
What else?
- Igor.
Governments consume a certain percentage of their nations gross domestic product. They will do whatever it takes to make sure their "cut" doesn't go down. The world will never live on information alone. There is always going to be a need for physical transactions. The government will just raise taxes on anything tangible. The lower class will end up paying a larger percentage of taxes because they utilize information/service technologies less then the middle and upper classes. The government and its "distributed wealth" ideals, will raise property taxes to try to even the load over the populace. Another idea is that the government will start taxing shipments. You buy a CD with your e-money, but it still has to be shipped. They can force the shipper to declare the value of the contents and collect the tax when the box arrives at your doorstop. This would be very hard to implement, but I wouldn't rule anything out at this point. When information and service becomes untaxable, you will see some very creative new taxes emerge. I have an idea for fully anonymous, offshore accountless electronic cash, but feel that the effort to implement it might be futile if the government were to ban any such successful technology. *** .sig under construction ***