From: Sandy <72114.1712@CompuServe.COM>
Date: Tue, 11 Jan 94 18:01:54 PST
To: <cypherpunks@toad.com>
Subject: CRYPTO/TAX
Message-ID: <940112014058_72114.1712_FHF126-1@CompuServe.COM>
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  SANDY SANDFORT               Reply to:  ssandfort@attmail.com
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C'punks,

Hal Finney wrote:

    I don't agree with the extreme position that
    cryptography will lead to the failure of the income tax
    and the destruction of the government.

    Consider: untraceable, anonymous transactions occur
    every day - not through cryptography, but through simple
    cash purchases at the local grocery store, gas station,
    department store, restaurant, and so on. There are many
    occupations which primarily involve cash transactions.
    Are these people immune from income tax?  Of course not.

Do these people pay such income tax?  Of course not.  The
government's own figures peg tax evasion at "only" 20%.  Yeah,
and Elvis lives in my closet.

    The government has many ways of extracting tax in these
    cases, ranging from periodic audits with heavy penalties
    (which keep people honest) to imputing income (as in the
    case of tip income by waiters), to fraud investigations
    for those living beyond their means.

Think "cost-benefit analysis."  Duncan has already pointed out
that the modal number of years spent in prison by tax evaders is
"zero."  Hal should get friendly with a weekend mechanic or a
waitress.  He might want to re-think his belief in the voluntary
tax compliance of alternative economy.

Perhaps Eric Hughes will recap the "crypto point-of-sale" rap he
gave at the previous Cypherpunks meeting.  (Or maybe he won't.)
What it demonstrated was that the types of economic transactions
that can benefit from crypto-privacy is much broader than Hal is
imagining.

We have already won.


 S a n d y

>>>>>>    Please send e-mail to:  ssandfort@attmail.com    <<<<<<
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