Re: Crypto & Taxes [WAS Re: Cybersecurity]
A couple of weeks ago, Michael Froomkin <froomkin@law.miami.edu> wrote:
fully applied crypto (e. g. fully anonymous digital cash) makes it essentially impossible to base a tax system on income.
Hold on. This is more "factoid" than "fact": recall that income is PAID by people as well as EARNED by people. Most payers have easily detectible physical presence and assets that can easily be attached by regulators. It will be a cold day before, e.g., my employer agrees not to report my earnings. And the same is true for most employers in most industries.
Unfortunately, this is true, at least for people whose employers are subject to income tax somewhere. Taxing businesses doesn't make sense economically - you could collect almost as much money with far less disruption to the underlying economy by taxing it as wages for workers and dividend or interest payments to owners* rather than inside the business itself, substantially reducing the accounting workload of businesses**. But it's still very attractive to governments, not only as a lever for implementing social policy and extracting cooperation, but as a critical tool to force businesses to report wages payed to employees - I don't know if law.miami.edu is a taxable business, but for most employers, if they don't report the wages they paid to their employees, but do report all their revenue, they get taxed on the additional profit, instead of the employee getting hit with the tax; most people I know who've been paid "under the table" have been working for small businesses that are also not reporting cash revenues. Of course, if a business isn't _spending_ money on employees, but is just contracting for work performed by an Anguillan corporation, they still have receipts for expenses, and the financial arrangements between the Anguillan corporation and any of its US employees aren't really their concern....
And if it ever stops being true, we'll just get VAT, and VAT inspectors. So the line about death and taxes remains as true as ever, crypto or no.
Value is really hard to measure in a service economy. Most of my work over the last N years has been talking to people, typing on keyboards, going places on airplanes to talk to other people and type on other keyboards, and occasionally handing people piles of collated and stapled dead trees, a racket for which people pay my employer lots of money***. Where's the value? When was it added? If the Tax Collectors don't see people handing my employer lots of money, can they demonstrate how much money they can confiscate? - - - - - - * this misses payments to foreign owners and taxes on foreign customers, but any government foolish enough to discourage investment by foreigners and sales to foreign customers deserves to be blamed heavily for lost jobs.. ** US businesses spend approximately 40% as much calculating taxes as they do _paying_ them... *** My previous employer was very good at taking metal, sand, and fermented dinosaur parts, and shaping them into boxes and strings that people would give them money for; they were extremely optimistic that they could get lots of people to also pay them money for sending them people to talk about boxes and strings and getting other people to pay _them_ for talking and banging on keyboards. They shouldn't have been quite so optimistic, and now I'm in the racket on my own, having not yet acquired overseas corporations to shelter my income through :-) #--- # Thanks; Bill # Bill Stewart, Freelance Information Architect, stewarts@ix.netcom.com # Phone +1-510-247-0664 Pager/Voicemail 1-408-787-1281 #---
Hold on. This is more "factoid" than "fact": recall that income is PAID by people as well as EARNED by people. Most payers have easily detectible physical presence and assets that can easily be attached by regulators. It will be a cold day before, e.g., my employer agrees not to report my earnings. And the same is true for most employers in most industries.
Unfortunately, this is true, at least for people whose employers are subject to income tax somewhere. Taxing businesses doesn't make sense economically - you could collect almost as much money with far less disruption to the underlying economy by taxing it as wages for workers and
Why unfortunately? I happen to consider that our modern social ecconomy is a high point of civilisation. It is certainly a tremendous achievement. We can educate the entire population, provide them with health care, prevent famine and provide protection against crime and agression by other states. All in all rather a good deal. While one might wish to personally avoid paying taxes there are no benefits if everyone avoids paying taxes. There are significant areas of the ecconomy which can only be funded through social mandates, roads for example. While there are fringe political elements who put forward alternative models I find them no more convincing than the claims of the Marxists who made similarly ideologically based assertions not so long ago. There have at least been examples of Marxist states, even though they were not particularly successful and rapidly degenerated into dictatorships. I find the libertopian obsession with government oppression and complete indifference towards coporate exploitation unsatisfactory. The truth is that both are inevitablty interlinked. For the "libertarian" it is unsatisfactory for the government to exploit consumers of utilities but entirely satisfactory for corporations to do so should they have the chance. The theoretical possiblity of competition making this acceptable even where there is no actual competition and hence no choice. This corprativist model accepts supression of freedom provided it is to commercial goals. Consider the linkage between direct mail advertising and surveilance. It is unecconomic for a government to trace the movements of every citizen. The communist countries were brought down as much by the cost of the huge surveilace administrations they constructed as anything else. In the West we do not have government surveilance, we have direct mail marketers do the job for government. Surveilance is made ecconomic by getting the citizen to subsidise it. It is naturally open for the government to apply information collected by these people for their own purposes. It is a salable commodity and the government is a willing buyer. Furthermore there is a sophisticated infrastructure in place to achieve these ends. The extent of corporate surveillance goes unnoticed by most citizens. Few people realise that when they use their credit card in a supermarket they are supplying a direct mail marketing company with a profile of their spending paterns. They are also providing a statement of where they are, and indirectly their income, residence etc. What is needed is stringent data protection laws which enforce the confidentiality of personal information. Note that both the SEPP and STT payments systems conceal the credit card number from the merchant. Cryptographic locks on individual parts of the picture are insufficient however. What is needed is laws which make the financing of the underlying architecture unecconomic. Phill
I strongly disagree with Mr. Hallam, but I am replying in private mail. This is far off the topic of the list. hallam@w3.org writes:
Hold on. This is more "factoid" than "fact": recall that income is PAID by people as well as EARNED by people. Most payers have easily detectible physical presence and assets that can easily be attached by regulators. It will be a cold day before, e.g., my employer agrees not to report my earnings. And the same is true for most employers in most industries.
Unfortunately, this is true, at least for people whose employers are subject to income tax somewhere. Taxing businesses doesn't make sense economically - you could collect almost as much money with far less disrupti
on
to the underlying economy by taxing it as wages for workers and
Why unfortunately? I happen to consider that our modern social ecconomy is a high point of civilisation. It is certainly a tremendous achievement. We can educate the entire population, provide them with health care, prevent famine and provide protection against crime and agression by other states. All in all rather a good deal.
While one might wish to personally avoid paying taxes there are no benefits i f everyone avoids paying taxes. There are significant areas of the ecconomy which can only be funded through social mandates, roads for example. While there are fringe political elements who put forward alternative models I find them no more convincing than the claims of the Marxists who made similarly ideologically based assertions not so long ago. There have at least been examples of Marxist states, even though they were not particularly successful and rapidly degenerated into dictatorships.
I find the libertopian obsession with government oppression and complete indifference towards coporate exploitation unsatisfactory. The truth is that both are inevitablty interlinked. For the "libertarian" it is unsatisfactory for the government to exploit consumers of utilities but entirely satisfactory for corporations to do so should they have the chance. The theoretical possiblity of competition making this acceptable even where there is no actual competition and hence no choice. This corprativist model accepts supression of freedom provided it is to commercial goals.
Consider the linkage between direct mail advertising and surveilance. It is unecconomic for a government to trace the movements of every citizen. The communist countries were brought down as much by the cost of the huge surveilace administrations they constructed as anything else. In the West we do not have government surveilance, we have direct mail marketers do the job for government. Surveilance is made ecconomic by getting the citizen to subsidise it. It is naturally open for the government to apply information collected by these people for their own purposes. It is a salable commodity and the government is a willing buyer. Furthermore there is a sophisticated infrastructure in place to achieve these ends.
The extent of corporate surveillance goes unnoticed by most citizens. Few people realise that when they use their credit card in a supermarket they are supplying a direct mail marketing company with a profile of their spending paterns. They are also providing a statement of where they are, and indirectly their income, residence etc.
What is needed is stringent data protection laws which enforce the confidentiality of personal information. Note that both the SEPP and STT payments systems conceal the credit card number from the merchant. Cryptographic locks on individual parts of the picture are insufficient however. What is needed is laws which make the financing of the underlying architecture unecconomic.
Phill
-----BEGIN PGP SIGNED MESSAGE----- Hallam writes Stewart writes
Froomkin writes
Hold on. This is more "factoid" than "fact": recall that income is PAID by people as well as EARNED by people. Most payers have easily detectible physical presence and assets that can easily be attached by regulators. It will be a cold day before, e.g., my employer agrees not to report my earnings. And the same is true for most employers in most industries.
Unfortunately, this is true, at least for people whose employers are subject to income tax somewhere. Taxing businesses doesn't make sense economically - you could collect almost as much money with far less disruption to the underlying economy by taxing it as wages for workers and
Why unfortunately? I happen to consider that our modern social ecconomy is a high point of civilisation. Far from civilized, taxation is a residue of our savage past, and its resurgence in this century is a backwards movement. Relations among civilized people are by mutual consent, or not at all. Taxation (and government generally) is an attempt by one segment of the population (the political segment) to impose a relation upon the rest of us to which we do not consent. It is certainly a tremendous achievement. We can educate the entire population, provide them with health care, prevent famine and provide protection against crime and aggression by other states. All in all rather a good deal. While one might wish to personally avoid paying taxes there are no benefits if everyone avoids paying taxes. There are significant areas of the ecconomy which can only be funded through social mandates, roads for example. My interest in cypherpunks is for its potential to enable a personal cryptographic defense against the arrogant aggressiveness of these arbitrary and intrusive politically motivated ``social mandates''. What is your interest in cypherpunks? To know your intended victims, perhaps? Few people realise that when they use their credit card in a supermarket they are supplying a direct mail marketing company with a profile of their spending paterns. They are also providing a statement of where they are, and indirectly their income, residence etc. So, don't use a credit card! What is needed is stringent data protection laws which enforce the confidentiality of personal information. Note that both the SEPP and STT payments systems conceal the credit card number from the merchant. Cryptographic locks on individual parts of the picture are insufficient however. What is needed is laws which make the financing of the underlying architecture unecconomic. Ah yes. More ``social mandates'' [I don't have time to read or write cypherpunks these days, but the idea that there's something civilized about taxation leapt out at me and demanded a response.] John E. Kreznar | 44D955A1F452DF66 | Taxes are caused by people jek@ininx.com | A1575DEF434DC152 | wanting government benefits. -----BEGIN PGP SIGNATURE----- Version: 2.6.i Comment: ...because I decline on principle to affirm any nationality. iQCVAgUBMJvhbQor0ZwpiwZpAQEARgP/bOpwC16JYTxaAA5ExHOEWQl/V6FYTHmo 46MrGVhSh6WLW6yIwMi2I4mhqISjzV6BtFf+/qu6JOOq7JejqdXKZX4SMcAAWuXh I+p3WSm5QwfLj9rfiKdnCfpO1NNsxx/HBeCIaXEY0tGVbWVp38vf+Kwugoe6a62C 3ylLFqNzgF4= =NAy5 -----END PGP SIGNATURE-----
On Fri, 3 Nov 1995 hallam@w3.org wrote:
Why unfortunately? I happen to consider that our modern social ecconomy is a high point of civilisation. It is certainly a tremendous achievement. We can educate the entire population, provide them with health care, prevent famine and provide protection against crime and agression by other states. All in all rather a good deal.
That wonderful state of bliss seems rather limited in certain parts of the world. Not that I want to get into a big political discussion, but David Friedman has a nice, calm and rational book called The Machinery of Freedom, 2nd ed, which argues anarchism/libertarianism from an economist'spoint of view. The argument is not cased in terms of ethics and morals but rather economic efficiency and utility. Slim, easy to read and cheap. He also has a good sense of humor. Unfortunately the book is currently on back order. I'm holding on to my library copy until they ship one to me. You can butt heads with him and Tim on the cyberia list (I don't remember the address but they have it at news://nntp.hks.net ) I gather from the cyphernomicon that someone recently converted him to cryptoanarchy.
As much as I agree with you, this really doesn't belong in Cypherpunks. This REALLY isn't a list about libertarian politics. .pm s1113645@tesla.cc.uottawa.ca writes:
On Fri, 3 Nov 1995 hallam@w3.org wrote:
Why unfortunately? I happen to consider that our modern social ecconomy is a high point of civilisation. It is certainly a tremendous achievement. We can educate the entire population, provide them with health care, prevent famine and provide protection against crime and agression by other states. All in all rather a good deal.
That wonderful state of bliss seems rather limited in certain parts of the world.
Not that I want to get into a big political discussion, but David Friedman has a nice, calm and rational book called The Machinery of Freedom, 2nd ed, which argues anarchism/libertarianism from an economist'spoint of view. The argument is not cased in terms of ethics and morals but rather economic efficiency and utility. Slim, easy to read and cheap. He also has a good sense of humor. Unfortunately the book is currently on back order. I'm holding on to my library copy until they ship one to me.
You can butt heads with him and Tim on the cyberia list (I don't remember the address but they have it at news://nntp.hks.net )
I gather from the cyphernomicon that someone recently converted him to cryptoanarchy.
participants (5)
-
Bill Stewart -
hallam＠w3.org -
jek＠ininx.com -
Perry E. Metzger -
s1113645＠tesla.cc.uottawa.ca