From: tcmay@got.net (Timothy C. May)
Date: Fri, 26 Apr 1996 18:58:27 +0800
To: cypherpunks@toad.com
Subject: Re: US law - World Law - Secret Banking
Message-ID: <ada59fc1270210048d39@[205.199.118.202]>
MIME-Version: 1.0
Content-Type: text/plain



On the issue of "money leaving the country illegally" (the general notion
that people taking money out of the country in suitcases or in charged-up
smartcards are doing something Evil and Unclean).

Just as we (and Phil Zimmermann, who widely made this point) were able to
convince a lot of people about strong crypto by talking about "sealed
letters" vs. "postcards," so, too, do we need to make the same points about
"untraceable cash flows" and even about "taking money out of the country."

I imagine this conversation with my father:

Dad: "But if the government needs to trace the spending of illegal money,
then these anonymous transfers you've been telling me about need to be
outlawed."

Me: "Can the government track that $100 you spent last week? Should it?"

Dad: "Well, no, that's my money and it's none of the government's damned
business what I spend it on."

Me: "So, we agree."

Dad: "Well, but the drug dealers have to be tracked."

Me: "First, the drug dealers are likely dealing in such mega-quantities
that they'll simply find compliant banks and other ways to hide the
transfers. It's unlikely that any of the proposed tracking schemes will be
effective. Second, how can the government possibly know which funds are
drug-related and which are not? Their scheme involves sacrificing
fundamental liberties for the dubious possibility that _some_ drug dealers
will be caught. Random raids on  houses would probably work better, but of
course would be just as unconstitutional."

Dad: "But then what do we do about the drug dealers?"

Me: "You and me don't do drugs. So what's the problem?"

Dad: "But..."

Me: "Name a drug that kills more people per year than alcohol. Or nicotine."

Dad: "Well...."

[My father, at age 72, has come around to the "legalize all drugs"
position, a view also supported by noted thinkers and former politicians,
including former Secretary of State George Schulz (or Shultz, or some
variant).]

I 'm convinced that a similar argument applies to those transferring funds.
Many funds transfers are not even tax evasion; I am one of many people who
are researching ways to expatriate some or all of my funds to jurisdictions
friendlier than the U.S. So long as I fill out the proper boxes on my 1040,
and pay appropriate taxes, I am committing no crime by moving my wealth to
some other country.

Those on the list about a year or so ago may recall that there are
proposals to in fact impose a "capital flight tax." This would make the
U.S. a country very much like the former Soviet Union, which forbade such
transfers of wealth without payment of heavy taxes.

The recent FinCEN-friendly conference in San Francisco raised the alarm
about digital cash and smartcards being used to make money transfers
easier. Horrors!

--Tim May

Boycott "Big Brother Inside" software!
We got computers, we're tapping phone lines, we know that that ain't allowed.
---------:---------:---------:---------:---------:---------:---------:----
Timothy C. May              | Crypto Anarchy: encryption, digital money,
tcmay@got.net  408-728-0152 | anonymous networks, digital pseudonyms, zero
W.A.S.T.E.: Corralitos, CA  | knowledge, reputations, information markets,
Licensed Ontologist         | black markets, collapse of governments.
"National borders aren't even speed bumps on the information superhighway."