32 ms·

If I collect money for my illegal pharmacy, then launder it through some retail front, am I not paying all taxes at that point?

eropple 9y ago
...No? You haven't paid taxes on the first transaction at all.
- MichaelGG 9y ago
  There wouldn't be a second transaction (the front store) if it weren't for trying to pay taxes on the first. So that's not really a defensible line of reasoning. Only, perhaps, if the tax rates would differ.
  - eropple 9y ago
    It doesn't matter why they exist: they are different transactions and taxes are assessed separately.
    - MichaelGG 9y ago
      Sure, so if you want to use circular logic to say the real crime of money laundering is tax evasion, when money laundering actually results in more taxes being paid, that's fine. But don't expect that to be a persuasive moral argument for making money laundering a crime.
      - eropple 9y ago
        I didn't say the real crime of money laundering is tax evasion. The real crime of money laundering is obstruction of justice. But taxes are certainly being evaded, too.
celticninja 9y ago
You are paying some tax, just not all the required tax. Specifically you are evading income taxes. As I recall in the US at least, there is an option on your IRS form to report any income derived from illegality so that the relevant tax can be paid. Whether anyone has ever done so I don't know but something like that could have kept Capone out of prison.
- MichaelGG 9y ago
  If you illegally sell $10 worth of drugs, then record your front store of selling $10 of Tylenol (that you don't actually buy or sell) then the $10 of drug money has been fully taxed.
  - curun1r 9y ago
    There's taxes from the supply chain of Tylenol that don't get paid when it's $10 in illegal drugs that are actually sold. Much like Bitcoin, with a black market you can only tax at the egress points when the money needs to touch a regulated financial entity whereas an all-legal system can tax any time money changes hands.
    - MichaelGG 9y ago
      Certainly that's someone else's crime, and they need to launder their own proceeds.

eropple 9y ago

...No? You haven't paid taxes on the first transaction at all.

MichaelGG 9y ago
There wouldn't be a second transaction (the front store) if it weren't for trying to pay taxes on the first. So that's not really a defensible line of reasoning. Only, perhaps, if the tax rates would differ.
- eropple 9y ago
  It doesn't matter why they exist: they are different transactions and taxes are assessed separately.
  - MichaelGG 9y ago
    Sure, so if you want to use circular logic to say the real crime of money laundering is tax evasion, when money laundering actually results in more taxes being paid, that's fine. But don't expect that to be a persuasive moral argument for making money laundering a crime.
    - eropple 9y ago
      I didn't say the real crime of money laundering is tax evasion. The real crime of money laundering is obstruction of justice. But taxes are certainly being evaded, too.

celticninja 9y ago

You are paying some tax, just not all the required tax. Specifically you are evading income taxes. As I recall in the US at least, there is an option on your IRS form to report any income derived from illegality so that the relevant tax can be paid. Whether anyone has ever done so I don't know but something like that could have kept Capone out of prison.

MichaelGG 9y ago
If you illegally sell $10 worth of drugs, then record your front store of selling $10 of Tylenol (that you don't actually buy or sell) then the $10 of drug money has been fully taxed.
- curun1r 9y ago
  There's taxes from the supply chain of Tylenol that don't get paid when it's $10 in illegal drugs that are actually sold. Much like Bitcoin, with a black market you can only tax at the egress points when the money needs to touch a regulated financial entity whereas an all-legal system can tax any time money changes hands.
  - MichaelGG 9y ago
    Certainly that's someone else's crime, and they need to launder their own proceeds.