From: Kevin Stephenson <cts@deltanet.com>
Date: Wed, 31 Jul 1996 14:30:35 +0800
To: Igor Chudov <ichudov@algebra.com>
Subject: Re: Taxes in the digicash world
In-Reply-To: <199607301117.GAA06799@manifold.algebra.com>
Message-ID: <31FEDF34.18FA@deltanet.com>
MIME-Version: 1.0
Content-Type: text/plain


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.


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