From: Toto <toto@sk.sympatico.ca>
Date: Mon, 6 Jan 1997 22:39:40 -0800 (PST)
To: Gary Howland <gary@systemics.com>
Subject: Re: Inflation-index bonds and private e-currency
In-Reply-To: <199701062213.XAA20921@internal-mail.systemics.com>
Message-ID: <32D207B6.34E8@sk.sympatico.ca>
MIME-Version: 1.0
Content-Type: text/plain


Gary Howland wrote:

> But digital currencies will never become fiat currencies, let alone legal
> tender, unless governments say they are.  So why should they worry?  (OK, OK,
> they will worry about tax evasion etc. etc.)

  Exactly. How can they claim, on one hand, that something does not
qualify 
as currency, or as legal tender, and then turn around and tax it?
  If I have 10 Million UNITS that aren't considered to legally be of
value,
then I'm certainly not going to 'go easy' to tax court.
  Any currency that becomes sufficiently distributed and traded will
find
itself becoming a 'legal entity' in some form or another.  Once it has
been 'entityenized' (don't bother looking for that word in the
dictionary),
it will be a short step for it to achieve a quantifiable status among
other currencies.

  The bottom line has always been that anything which manages to reach a
sufficient level of use that it causes the government to want a 'piece
of
the pie' becomes regulated, taxed, and enters the mainstream of the
economic system.
  There has been a card-game going on in Texas for close to a hundred
years which works on a personal credit system and the IRS, to this 
point, has been able to do no better than require the players to
'report'
as income any credits that become translated into hard goods or taxable
services.
  If this card game involved sufficient revenue to make a serious impact
on this country's economic system, then there would undoubtedly already
be an act of congress addressing the issue of drawing to an inside
straight.
 
>   "Regulation - which is based on force and fear - undermines the moral base
>   of business dealings. 
>     -- Alan Greenspan

  I hope that the IRS didn't take this as a personal attack.

Toto