From: Duncan Frissell <frissell@panix.com>
Date: Wed, 29 Jan 1997 09:19:46 -0800 (PST)
To: Declan McCullagh <stewarts@ix.netcom.com
Subject: Re: East German Collapse (Was: Fighting the cybercensor
In-Reply-To: <199701291642.IAA05043@toad.com>
Message-ID: <3.0.1.32.19970129122157.019fefe8@panix.com>
MIME-Version: 1.0
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At 10:53 AM 1/29/97 -0500, Declan McCullagh wrote:
>I disagree. Where does this money "escape" to? Do you spend it on rent,
>pizza, a new stereo? Hmm... These are all meatspace transactions and can
>be taxed.

Money that escapes into Cyberspace just remains there in much the same way that money that escapes offshore today just stays there.  It is not usually repatriated.

Offshore funds accumulate offshore and earn interest and dividends there.  If the onshore owners need their offshore money they do not, repeat do not, repatriate it.  They borrow it instead and pay it back with (deductible) interest expatriating more money.  The same practice can be followed in cyberspace.

Stateless funds (whether Offshore or in Cyberspace) can be used to:

1)	Pay salaries
2)	Make loans
3)	Buy digital goods and services (telecoms, entertainment, etc.)
4)	Pay school fees
5)	Pay for travel
6)	Pay for mail order goods (customs duties will fade)

Individuals can also easily support their lifestyles with Offshore or Cyberspace funds by using stateless credit cards and taking cash from ATM machines using stateless ATM cards.

You can certainly use offshore or cyberspacial funds to pay the rent on your flat in Montreux overlooking Lake Geneva and not too many taxes will be applied to that transaction.

Accumulating vast wealth (even if it is only represented as bits) can be very fun as well.

DCF
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