7 ms·

It's a trust but verify thing I believe. If the cash is anonymized, how can they know if the owner of this cash did in fact pay their taxes on it? Either they b

It's a trust but verify thing I believe. If the cash is anonymized, how can they know if the owner of this cash did in fact pay their taxes on it? Either they blindly trust everyone to properly declare all of their income, or they need to have some form of traceability.

Aeolun 7y ago
Once the cash is in the bank it becomes really hard to verify. It’s not like a ‘tax paid’ marker is added to every dollar in your account.
- ta999999171 7y ago
  Nor could it, with the millions of rounds of taxes an average paper dollars will see.
  - Scoundreller 7y ago
    > Nor could it, with the millions of rounds of taxes an average paper dollars will see. Somebody said a computer can't do something, somebody prove them wrong!
    - TeMPOraL 7y ago
      If you want to make money stop being fungible, well, you probably could use computers for that. But is it a wise idea?
bouncycastle 7y ago
So everyone is assumed to be a criminal until proven otherwise?
- RugnirViking 7y ago
  How else do you propose taxation is assured? Blind trust?
  - bouncycastle 7y ago
    Sure, why not? It has worked for many years before. The terms like "money laundering" are only recent and swept through without properly understanding the privacy implications (and probably didn't envisage the pervasiveness of modern electronic surveillance & data breaches in today's digital world). Anyhow, advancements in cryptographic Zero-knowledge proofs could hold the key in solving some of these problems (proof that funds are clean without reveling the source). Currently there are some scalability problems, but progress is being made so I'm hopeful. Wikipedia has a good write-up about the basics of ZKP https://en.wikipedia.org/wiki/Zero-knowledge_proof https://en.wikipedia.org/wiki/Zero-knowledge_proof
    - shakna 7y ago
      > Sure, why not? It has worked for many years before. Citation very much needed. It depends on what you mean by "working". There's references to tax evasion going back before the Roman Empire. For an example from the era of the Roman Empire, the topic of tax evasion is where the story of "give to Caesar what is his" (Mark 12:17) comes from. (I've found earlier Greek references going back to at least 300BC, but that's the easiest example to verify). The state works better when it has funds to deliver on those plans - though there are many other factors that can disrupt it such as incompetence and corruption. "Money laundering" may be a recent term, but it is not a recent concept. In fact some notable conquests on the ancient world wouldn't have been possible without concealing ill-gotten funds. It was a common tactic for avoiding paying tribute to a neighbour who defeated you.
      - bouncycastle 7y ago
        I don't think you need any citation or reference to know that even as early as 20 years ago there wasn't as much pervasive computerized record keeping and surveillance as there is now. By "worked well" I mean people paid their taxes and the overwhelming majority were law abiding. Here's one example to ponder about: if we had this kind of surveillance earlier, would things like the Civil Rights Movement and generally the 60's counterculture come about? I.e. the era of "sex and drugs and rock'n'roll"? If only the authorities had the tools that they have today, oh boy! Don't like the liberation of sex? Is rock'n'roll the Devi's music? Fine. We'll close your PayPal account. Privacy is very important for having a free society and freedom of expression. Financial privacy should be no exception.
- wolco 7y ago
  If you've gone to a movie they don't let everyone in and assume they had a ticket. Doesn't mean they think of you as a criminal.
  - bouncycastle 7y ago
    I mostly have in mind the KYC strip-tease one must go through nowadays do open an account or purchase anything over $1000. There's no privacy these days.
    - Baneofbatman 7y ago
      That's the problem with making zero tolerance the ultimate goal of society. Either we accept there will always be a few bad apples or everyone has to prove they aren't one of them.
      - Mirioron 7y ago
        And our society seems to have picked the latter because it sounds good when it comes out of the mouth of a politician. This is probably a weakness of democracy.
        jrumbut 7y ago
        It's probably a weakness of democracy, sure, but it's not as though "total financial freedom and anonymity" are common properties of non-democratic states. Most of the problems in democracies seem to exist, possibly magnified, in the alternatives.
        dllthomas 7y ago
        IIUC, the "problem with democracy" being pointed to is not the outcome in this particular case, but the general tendency for us to make decisions that sound good without thinking too deeply.
        7y ago
- vintermann 7y ago
  If "property is theft" is too harsh, how about "property is theft until proven otherwise"? Whether you agree with it or not, money laundering laws usually go in this direction.
john_minsk 7y ago
Risk based assessment. You look at macro parameters that businesses submit and if it flags you among other companies you dive deeper and request information from business itself. More friendly approach to If you find something fishy - you penalize business for different misconduct and signal them to be compliant in the future. In general big businesses/taxpayers will be compliant anyway (but use all the loopholes that exist in your tax law) While smaller businesses will have trouble to be compliant not because they don't want to, but because they can't have their accounting straight. So there is no good justification for government to scan every transaction without prior justification, since most actors want to be compliant anyway. I come from post USSR country and have a small fortune accumulated abroad. I don't have to pay taxes from this money, since I'm not a tax resident in my country at the moment. But since laws in my country work against regular people and some of them are prohibitive to work abroad/in modern digital way - the moment I transfer this money back home, our tax authority will pull some outdated law and the burden of proof will be on me (with my bank account frozen) I DON'T NEED THIS. So please, 1st world countries, don't send information on my hard earned money, to our 25 year strong socialist dictator.

Aeolun 7y ago

Once the cash is in the bank it becomes really hard to verify. It’s not like a ‘tax paid’ marker is added to every dollar in your account.

ta999999171 7y ago
Nor could it, with the millions of rounds of taxes an average paper dollars will see.
- Scoundreller 7y ago
  > Nor could it, with the millions of rounds of taxes an average paper dollars will see. Somebody said a computer can't do something, somebody prove them wrong!
  - TeMPOraL 7y ago
    If you want to make money stop being fungible, well, you probably could use computers for that. But is it a wise idea?

bouncycastle 7y ago

So everyone is assumed to be a criminal until proven otherwise?

RugnirViking 7y ago
How else do you propose taxation is assured? Blind trust?
- bouncycastle 7y ago
  Sure, why not? It has worked for many years before. The terms like "money laundering" are only recent and swept through without properly understanding the privacy implications (and probably didn't envisage the pervasiveness of modern electronic surveillance & data breaches in today's digital world). Anyhow, advancements in cryptographic Zero-knowledge proofs could hold the key in solving some of these problems (proof that funds are clean without reveling the source). Currently there are some scalability problems, but progress is being made so I'm hopeful. Wikipedia has a good write-up about the basics of ZKP https://en.wikipedia.org/wiki/Zero-knowledge_proof https://en.wikipedia.org/wiki/Zero-knowledge_proof
  - shakna 7y ago
    > Sure, why not? It has worked for many years before. Citation very much needed. It depends on what you mean by "working". There's references to tax evasion going back before the Roman Empire. For an example from the era of the Roman Empire, the topic of tax evasion is where the story of "give to Caesar what is his" (Mark 12:17) comes from. (I've found earlier Greek references going back to at least 300BC, but that's the easiest example to verify). The state works better when it has funds to deliver on those plans - though there are many other factors that can disrupt it such as incompetence and corruption. "Money laundering" may be a recent term, but it is not a recent concept. In fact some notable conquests on the ancient world wouldn't have been possible without concealing ill-gotten funds. It was a common tactic for avoiding paying tribute to a neighbour who defeated you.
    - bouncycastle 7y ago
      I don't think you need any citation or reference to know that even as early as 20 years ago there wasn't as much pervasive computerized record keeping and surveillance as there is now. By "worked well" I mean people paid their taxes and the overwhelming majority were law abiding. Here's one example to ponder about: if we had this kind of surveillance earlier, would things like the Civil Rights Movement and generally the 60's counterculture come about? I.e. the era of "sex and drugs and rock'n'roll"? If only the authorities had the tools that they have today, oh boy! Don't like the liberation of sex? Is rock'n'roll the Devi's music? Fine. We'll close your PayPal account. Privacy is very important for having a free society and freedom of expression. Financial privacy should be no exception.
wolco 7y ago
If you've gone to a movie they don't let everyone in and assume they had a ticket. Doesn't mean they think of you as a criminal.
- bouncycastle 7y ago
  I mostly have in mind the KYC strip-tease one must go through nowadays do open an account or purchase anything over $1000. There's no privacy these days.
  - Baneofbatman 7y ago
    That's the problem with making zero tolerance the ultimate goal of society. Either we accept there will always be a few bad apples or everyone has to prove they aren't one of them.
    - Mirioron 7y ago
      And our society seems to have picked the latter because it sounds good when it comes out of the mouth of a politician. This is probably a weakness of democracy.
      - jrumbut 7y ago
        It's probably a weakness of democracy, sure, but it's not as though "total financial freedom and anonymity" are common properties of non-democratic states. Most of the problems in democracies seem to exist, possibly magnified, in the alternatives.
        dllthomas 7y ago
        IIUC, the "problem with democracy" being pointed to is not the outcome in this particular case, but the general tendency for us to make decisions that sound good without thinking too deeply.
        7y ago
vintermann 7y ago
If "property is theft" is too harsh, how about "property is theft until proven otherwise"? Whether you agree with it or not, money laundering laws usually go in this direction.

john_minsk 7y ago

Risk based assessment. You look at macro parameters that businesses submit and if it flags you among other companies you dive deeper and request information from business itself. More friendly approach to If you find something fishy - you penalize business for different misconduct and signal them to be compliant in the future. In general big businesses/taxpayers will be compliant anyway (but use all the loopholes that exist in your tax law) While smaller businesses will have trouble to be compliant not because they don't want to, but because they can't have their accounting straight. So there is no good justification for government to scan every transaction without prior justification, since most actors want to be compliant anyway. I come from post USSR country and have a small fortune accumulated abroad. I don't have to pay taxes from this money, since I'm not a tax resident in my country at the moment. But since laws in my country work against regular people and some of them are prohibitive to work abroad/in modern digital way - the moment I transfer this money back home, our tax authority will pull some outdated law and the burden of proof will be on me (with my bank account frozen) I DON'T NEED THIS. So please, 1st world countries, don't send information on my hard earned money, to our 25 year strong socialist dictator.