On Tue, 22 Oct 1996, Bert-Jaap Koops wrote:

Excuse me if I don't react on this in detail. We have already explained it, and there it stands: fraud means playing a game without abiding by its rules. It's perfectly legitimate to establish a game and to introduse rules of the game with it. If you want to play the ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ BIG Problem here.

game, play by its rules, otherwise don't play it. If you play it while cheating, though, you must bear the consequences ("go directly to jail" ;-).

Bert-Jaap

I sincerely wish the world were THAT simple - there would be fewer problems. Very, very often particularly when international commerce is involved, there simply is a disagreement about how much tax is actually owed. The laws of trade & taxation are so complex that there are often several ways of accomplishing the same transaction each with very different tax liabilities. Certain European import/export transactions involving multiple currencies can be incredibly complex. Then there is always the VAT (Value Added Tax). Even here in the states, where tax laws "should" be the most uniform, there is a fair amount of confusion and disagreement about what the ever-changing tax laws and reporting requirements of the individual states really mean. In Tennessee, if a distributor sends a drop-shipment to an end-user as a service performed to a reseller, the distributor incurs a liability for state sales tax; even though the distributor's sale was tax exempt to the reseller who would have delivered it anyway. The state collects twice! Does sending mail or making a phone call into another state constitute a "Physical Prescence" which would incur a state sales tax? North Dakota seems to think so. What about an Internet prescence? Taxing authorities _rarely_ have all the information required to enforce the details of their own tax laws... that doesn't stop them, of course. They'll take an aggressive stance, and then it's up to *you* to prove them wrong. In some cases, it may be effectively as if the business is "guilty until proven innocent." If politics are involved, look out. It sounds like Shamir got hit with a _very_ aggressive stance. Of course it must be less easy to defend your actions while confined. Er, what would crypto have to do with politics anyway? (ahem!) Here is the USA a few years back, we actually had a _retroactive_ change in the tax tables by Congress. Isn't that nice... A retroactive change in the law! We've gotten accustomed to retroactive law changes by appellate courts - but this was a retroactive change by Congress. When you _do_ know them, they may change. There is big money in the changing of laws. Those who enforce the rules may interpret them quite differently if money and/or politics are involved. What does politics have to do with money anyway? (ahem!) If you have enough money, you can have the laws written to your favor, just like Donald Trump, Trammel Crow and dozens of other Real-Estate barons did when they joined George Bush's "Club-100" by contributing $100K and enjoying an immediate Commercial Real Estate tax cut when he got elected. Looks like these folks definitely knew a good investment. But this is nothing. We have a burgeoning lobbyist industry in Washington, and there's little or nothing anyone can do about it. In short, I disagree very strongly that it is as simple as playing by the rules. The first rule is that you cannot know all the rules. Further, any rule you _do_ know may be subject to change. You have to become an expert on what is likely to be static for your own purposes, and act within the limits of your own knowledge. Self-knowledge being perhaps our greatest challenge, there are _bound_ to be problems on all sides. Perhaps the widespread dissemination of strong crypto will ultimately have a scale-tilting effect on matters of taxation. -Doug "An interesting game. The only winning move is not to play." -War Games