8 ms·

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

by bouncycastle 7y ago

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.
      - ComodoHacker 7y ago
        Majority of people paid their taxes, but many didn't, many more than today. Think of mafias of all kinds. So law abiding majority had to pay more to cover state expenses. Without computerized record keeping taxes were collected in person, often with support of armed force. And tax evasion could be as simple as hiding in the woods when tax collector comes. It worked, but not so well.
        feanaro 7y ago
        Yet the world itself worked rather well. That must either mean that taxing working well is not necessary for the world to work well or that it worked better than you are implying.
        SiempreViernes 7y ago
        You're aware that depending on where you are in the world you can sample a vast range of development levels, so where exactly do you wish to move to have this well functioning society where people are taxed on trust alone?
        feanaro 7y ago
- darawk 7y ago
  Design tax policy so that it doesn't force the government to be involved in every single transaction people engage in. Something like a land value tax, perhaps.
  - synchronise 7y ago
    They have something similar in Aus called the Capital Gains Tax and it is something that is inherrently political, unfortunately you can't uncouple the government from as they provide the public service that maintain and collect taxes. Honestly the public service should be answerable to parliament, not government. Not to mention CGT been tweaked to ineffectiveness by previous governments by excluding assets from its calculations, notably housing, which has skewed CGT away from its original purpose and it's now more of a stick to whack at industries that aren't cozy with the current government.
    - Taniwha 7y ago
      The US has a CGT, capital gains are taxed at your normal marginal income tax rate unless you hold them for a minimum time in which case you pay a slightly lower rate. Though they do provide some exemptions for the family home. Not all that political thing. In fact in many countries CGT is only used to refer to the LOWER version of the tax ... after all you should pay income tax whether you make your income digging ditches, house flipping, or day trading
- Mirioron 7y ago
  Tax the corporation when an individual buys goods. Essentially a much bigger VAT.
  - lifeisstillgood 7y ago
    VAT is regressive - that is it takes a proportionately larger chunk the poorer you are - often considered unfair. For example if I and Warren Buffet buy a car then I have spent a much larger percentage of my overall wealth than he does
    - post_below 7y ago
      Warren Buffet is likely to buy a much more expensive car, or cars. He's spending more on everything than you are. That doesn't even things up, of course, but then neither does the current system. It would arguably be closer to even. The beauty of a universal sales tax (as an alternative to income tax), in addition to the fact that the wealthy consume more of everything, is that a transaction tax is more difficult to lobby loopholes into. And, of course, it potentially doesn't need as large (read expensive) a bureaucracy to manage and enforce it. It also removes the burden of record keeping/reporting from consumers and payroll tax from employers. A lot of people have spent time thinking about the idea. One example: https://fairtax.org/ https://fairtax.org/ It's not a problem free solution of course, but neither is the current one. Someday a proposal for a transaction tax might even make it out of committee.
      - IAmEveryone 7y ago
        In the grand scheme of things, Warren Buffet does not spend any money on taxable products. He invests money, but investments cannot be taxed in a VAT scheme, for obvious reasons.
      - michaelt 7y ago
        > Warren Buffet is likely to buy a much more expensive car, or cars. According to [1] Warren Buffett's house is worth .001% of his total wealth, at $652,619. And for Warren Buffet to pay sales tax proportional to someone with $500,000 in assets buying a $50,000 car, he'd have to buy the world's most expensive car - a $5 million Koenigsegg of which only 3 were ever made - 1700 times over. [1] https://www.businessinsider.com/warren-buffett-modest-home-bought-31500-looks-2017-6?r=US&IR=T https://www.businessinsider.com/warren-buffett-modest-home-b...
- squiggleblaz 7y ago
  Tax assets not transactions. Land ownership is registered for good public purposes which does not unreasonably destroy privacy concerns - it's usually obvious who (person or business) controls the land anyway (who should a tenant pay the rent to? who gets to decide if you can be a tenant?) and it gives people a great deal of confidence that they know that whoever is recorded in the government land registry as having a right to sell the property actually has that right. The common law approach of having to hold a series of documents that identify a continuous line of owners going back to some unconfirmable initial grant by a long dead king is not in the interest of the purchaser of the land. Moreover, the market distortions taxing land (as the primary source of government income) will have are generally positive. A person can no longer buy a house in the hope that the land it sits on will double in value. They can only buy a house in the hope that they are capable of making a profit out of it; the land purchase merely gives them the right to improve it. The same advantages may be visible for taxation of share holdings: instead of simply trying to profit from someone else's actions, you would buy shares because you think the dividends will exceed other income sources for the same purchase. It may be legitimate to have anonymous share holdings which require active detective work, so it's possible this would be an unreasonable invasion of privacy.
  - mcny 7y ago
    > Tax assets not transactions. I know I've said that we shouldn't do public policy by taxes but taxing wealth instead of income probably isn't easy. We can tax income because one person's income is another person's expense if I understand how this works.
    - Nasrudith 7y ago
      Reminds me of annecdote of old tax policies on things like silverware and the difficulty in believing and searches from one austere preacher who anomalously for his station didn't own a single set. And others like the tax on windows which lead to boarding up of windows in slums and became derided as a tax on light and air. The answer seems to be that how well it works varies heavily on what the asset.
  - arethuza 7y ago
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.

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.
    - ComodoHacker 7y ago
      Majority of people paid their taxes, but many didn't, many more than today. Think of mafias of all kinds. So law abiding majority had to pay more to cover state expenses. Without computerized record keeping taxes were collected in person, often with support of armed force. And tax evasion could be as simple as hiding in the woods when tax collector comes. It worked, but not so well.
      - feanaro 7y ago
        Yet the world itself worked rather well. That must either mean that taxing working well is not necessary for the world to work well or that it worked better than you are implying.
        SiempreViernes 7y ago
        You're aware that depending on where you are in the world you can sample a vast range of development levels, so where exactly do you wish to move to have this well functioning society where people are taxed on trust alone?
        feanaro 7y ago
darawk 7y ago
Design tax policy so that it doesn't force the government to be involved in every single transaction people engage in. Something like a land value tax, perhaps.
- synchronise 7y ago
  They have something similar in Aus called the Capital Gains Tax and it is something that is inherrently political, unfortunately you can't uncouple the government from as they provide the public service that maintain and collect taxes. Honestly the public service should be answerable to parliament, not government. Not to mention CGT been tweaked to ineffectiveness by previous governments by excluding assets from its calculations, notably housing, which has skewed CGT away from its original purpose and it's now more of a stick to whack at industries that aren't cozy with the current government.
  - Taniwha 7y ago
    The US has a CGT, capital gains are taxed at your normal marginal income tax rate unless you hold them for a minimum time in which case you pay a slightly lower rate. Though they do provide some exemptions for the family home. Not all that political thing. In fact in many countries CGT is only used to refer to the LOWER version of the tax ... after all you should pay income tax whether you make your income digging ditches, house flipping, or day trading
Mirioron 7y ago
Tax the corporation when an individual buys goods. Essentially a much bigger VAT.
- lifeisstillgood 7y ago
  VAT is regressive - that is it takes a proportionately larger chunk the poorer you are - often considered unfair. For example if I and Warren Buffet buy a car then I have spent a much larger percentage of my overall wealth than he does
  - post_below 7y ago
    Warren Buffet is likely to buy a much more expensive car, or cars. He's spending more on everything than you are. That doesn't even things up, of course, but then neither does the current system. It would arguably be closer to even. The beauty of a universal sales tax (as an alternative to income tax), in addition to the fact that the wealthy consume more of everything, is that a transaction tax is more difficult to lobby loopholes into. And, of course, it potentially doesn't need as large (read expensive) a bureaucracy to manage and enforce it. It also removes the burden of record keeping/reporting from consumers and payroll tax from employers. A lot of people have spent time thinking about the idea. One example: https://fairtax.org/ https://fairtax.org/ It's not a problem free solution of course, but neither is the current one. Someday a proposal for a transaction tax might even make it out of committee.
    - IAmEveryone 7y ago
      In the grand scheme of things, Warren Buffet does not spend any money on taxable products. He invests money, but investments cannot be taxed in a VAT scheme, for obvious reasons.
    - michaelt 7y ago
      > Warren Buffet is likely to buy a much more expensive car, or cars. According to [1] Warren Buffett's house is worth .001% of his total wealth, at $652,619. And for Warren Buffet to pay sales tax proportional to someone with $500,000 in assets buying a $50,000 car, he'd have to buy the world's most expensive car - a $5 million Koenigsegg of which only 3 were ever made - 1700 times over. [1] https://www.businessinsider.com/warren-buffett-modest-home-bought-31500-looks-2017-6?r=US&IR=T https://www.businessinsider.com/warren-buffett-modest-home-b...
squiggleblaz 7y ago
Tax assets not transactions. Land ownership is registered for good public purposes which does not unreasonably destroy privacy concerns - it's usually obvious who (person or business) controls the land anyway (who should a tenant pay the rent to? who gets to decide if you can be a tenant?) and it gives people a great deal of confidence that they know that whoever is recorded in the government land registry as having a right to sell the property actually has that right. The common law approach of having to hold a series of documents that identify a continuous line of owners going back to some unconfirmable initial grant by a long dead king is not in the interest of the purchaser of the land. Moreover, the market distortions taxing land (as the primary source of government income) will have are generally positive. A person can no longer buy a house in the hope that the land it sits on will double in value. They can only buy a house in the hope that they are capable of making a profit out of it; the land purchase merely gives them the right to improve it. The same advantages may be visible for taxation of share holdings: instead of simply trying to profit from someone else's actions, you would buy shares because you think the dividends will exceed other income sources for the same purchase. It may be legitimate to have anonymous share holdings which require active detective work, so it's possible this would be an unreasonable invasion of privacy.
- mcny 7y ago
  > Tax assets not transactions. I know I've said that we shouldn't do public policy by taxes but taxing wealth instead of income probably isn't easy. We can tax income because one person's income is another person's expense if I understand how this works.
  - Nasrudith 7y ago
    Reminds me of annecdote of old tax policies on things like silverware and the difficulty in believing and searches from one austere preacher who anomalously for his station didn't own a single set. And others like the tax on windows which lead to boarding up of windows in slums and became derided as a tax on light and air. The answer seems to be that how well it works varies heavily on what the asset.
- arethuza 7y ago

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.