From: Tim May <tcmay@got.net>
Date: Fri, 18 Jul 1997 12:54:53 +0800
To: cypherpunks@Algebra.COM
Subject: Re: "Time to Walk the Walk down the Gang Plank"
In-Reply-To: <v03102801aff48a1390fc@[207.167.93.63]>
Message-ID: <v03102802aff4a4a9d00a@[207.167.93.63]>
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At 8:19 PM -0700 7/17/97, William H. Geiger III wrote:

>Actually with some "creative" accounting one can make use of the net to
>cirumvent large amount of corporate & personal income tax. :)
>
>It is quite possible to set up virtual corporations who's complete
>bussines is done over the wire. While some setions of industry can benifit
>from this more than others I see in the future a large section of the
>revenue stream migrating offshore to various taxhavens beyoned the reach
>of the little piggies in DC. :)

Well, obviously I'm well acquainted with this particular theory....

However, pulling it off is the hard part. A few data points:

- my income derives solely at this point from investments. No better
example of a "geodesic economy" exists...my assets and sources of income
can be located anywhere on Earth, and can be sent there with a few phone
calls. And, yet, I continue to pay the IRS, the Franchise Tax Board, and
various regional satrapies truly obscene amounts of taxes.

(Why? Because sending my assets to Foobaria and then attempting to live
tax-free off the income/dividends/sales is not currently feasible. Note to
the advocates of this strategy: not even the advocates of using offshore
banks think this is workable as a tax avoidance scheme.)

- I rather suspect that all of the employees of C2Net, surely a
"Cypherpunks company" if ever there were one, mundanely receive their W-2s
and file diligently. (Actually, the odds are that some of them are already
delinquent on filing, but the point remains valid.)

- John Walker, the founder of Autodesk (Autocad), became a citizen of
Belize and now lives in Switzerland. As above, a "virtual entity." And yet
he tells me his taxes are higher than if he'd remained in the U.S. (he left
for complicated reasons, involving taxes, but not necessarily to reduce his
personal taxes).

So, I admire the theory. In fact, I wrote many essays on related points.
(Cf. "crypto anarchy") But it's not at all easy to pull it off.

Maybe in 10 years.

--Tim

There's something wrong when I'm a felon under an increasing number of laws.
Only one response to the key grabbers is warranted: "Death to Tyrants!"
---------:---------:---------:---------:---------:---------:---------:----
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,
Higher Power: 2^1398269     | black markets, collapse of governments.
"National borders aren't even speed bumps on the information superhighway."