> Banknotes are useful. Not only do they provide their owner with a standard set of payments services, they also offer financial anonymity.
> The product is weaponized and turned against its provider. This same sort of weaponization characterizes the modern provision of banknotes. The government, like Walmart, provides citizens with a privacy-enhancing product: cash.
This article has a strange fixation on the anonymous aspect of cash. It's almost suggesting that it's morally wrong to use cash (though we seem to tolerate it in society), and that non-anonymous alternatives that are tracked are better.
Let me give several arguments for why cash is beneficial even if you ignore anonymity:
0) Payments are final. Once you handed over cash, it cannot be taken back - unlike cheques and electronic money transfers, where you can claim "it was fraud" and ask the bank to reverse the payment. This gives the receiver a fairly strong guarantee of payment (except for counterfeit cash).
1) Payments are limited. Once you paid the cash and walk away, the receiver cannot take more money out of your wallet. This is unlike cheques and credit cards, where the receiver could use the account numbers to charge you more money anytime later.
2) No censorship. Look at the categories of goods and services that Visa and Mastercard ban. You might not agree with all of them. You might not be happy about future changes in rules.
3) No tolling. For the privilege of spending money on a credit card, the credit card company charges ~2% to the merchant, who in turn raises prices on the goods that you buy. Other payment methods like cheques, debit, bank transfers, wire transfers, etc. have other fee structures (generally much less than credit cards), but the fact that these payments are intermediated by financial companies means that they could charge arbitrary fees to you for transferring your money.
4) It's offline, and works in the absence of electric power. Even if you're in a tiny village deep in the middle of the Amazon forest, you can still pay for things with cash.
it's also useful when power is cut, for example in case of natural disaster (I just saw today a video on Waffle House, where their disaster playbook mentioned just that)
> It's useful with children. A concrete representation of value is tangible compared to an abstract number in a bank account.
I hear this often, but I'm not at all convinced it's true.
And even if it were: Children will eventually grow up and have to manage their non-cash finances at some point. Why not teach them early?
I've had a checking account and debit card since I was 10 years old, and subjectively this has only contributed to being able to treat "abstract" and physical money as exactly the same from a budgeting point of view.
> It's great for gifts
For in-person gifts. Sending it in the mail is usually a bad idea, as I've personally experienced too often in my life.
Also, at least in the US, there seems to be some weird stigma against cash gifts that's created a huge industry of Visa/Mastercard gift cards with horrendous fees and a high chance of falling victim to some kind of scam.
> It's almost suggesting that it's morally wrong to use cash
Quite the opposite actually, it emphasizes the importance of such anonymity but also acknowledges that it also comes with problems for society.
> 0) Payments are final. Once you handed over cash, it cannot be taken back
First this isn't true, as most good comes with legal guarantee, retraction rights and so on. And then the near-final aspect of cash is also the reason why armed robberies works. (And yes I said near final, because the police routinely seize cash from people who got it illegally).
> 3) No tolling.
Cash is extremely expensive to handle for banks, and even if they don't charge you directly, they definitely factor this cost in what they charge to all their customers (business and individuals alike).
> Quite the opposite actually, it emphasizes the importance of such anonymity but also acknowledges that it also comes with problems for society.
I think this is just a tongue-in-cheek argument by the author. The article suggests adding a penalty for using cash, which, given the highly competitive payments landscape, will effectively accelerate the phase-out.
Cynically, this could be read as making payment privacy exclusive to the better off, which has its own highly problematic implications.
Purely from the perspective of raising more government funds, I can understand their argument. But from that perspective, I think there are better, less disruptive ways for governments to extract value from the payments system.
> First this isn't true, as most good comes with legal guarantee, retraction rights and so on.
Finality of the underlying transaction is a different concern than that of the means of payment.
Cash is indeed, at least in some jurisdictions, the only thing you can be sure to not have taken away from you when acquired bona fide, even if it turns out to have originally been stolen from its legitimate owner.
Practically, some other payment methods have similar guarantees, though (for example, you generally can't have money clawed back as a merchant accepting credit or debit cards in person).
None of those qualities are true of crypto currency. It is not anonymous with bitcoin, it is not final as with tether, and KYC makes it not censorship resistant either. And for all this it has fairly high tolls too. Crypto is not a currency used for trade except illegal trade. It is a greater fool scheme.
> But an across-the-board price increase hardly seems fair. Those abiding by Walmart’s rules are being asked to make up for a shortfall that is entirely the fault of suit-stealing rule breakers. Honest shoppers who don’t generally like to use invisible suits will be particularly furious — and who can blame them? They are being asked to pay more for the goods they hold dear in order to support the use of a single product they never cared for much anyway.
The generic form of this argument is that you put a tax on stealing in general. But we already have that; it's the laws against stealing (or tax evasion).
Obviously you can still be caught for tax evasion even if you're using cash. The counterparty can report you and the IRS pays rewards for that sort of thing. Law enforcement can notice that you're living in a mansion and have six cars while reporting no income and investigate how you're paying for it. Moreover, that puts the cost on the people actually evading taxes, instead of on all the innocent people using the anonymous payment method. And isn't the point here supposed to be to not impose costs on innocent people, and to deter tax evasion rather than deterring privacy?
Also notice that even the proposed system already exists. If you have digital money in a bank you get interest (CD rates currently ~5% APY), if you have cash in a mattress you don't. But people using cash to evade taxes don't have to stick it in a mattress anyway; they can just spend it immediately, which is what they already do because of the existing incentives.
So, the idea is to make one of the stronger methods of avoiding being spied on to be a privilege only available to people with enough means to be able to pay for it?
This is directly backward from the way it should work. You shouldn't have to incur a formal financial penalty just because you want to minimize the amount of spying you're subjected to.
This has implications for more than just the inability of the poor to have any privacy. If you impose a deterrent to the anonymous payment method then it becomes less widely used and less widely supported, creating more barriers for the people with sufficient legitimate need for anonymity that they would suffer the additional fee in itself, and making them stand out more.
There was a time that taxes were extorted through force by strongmen and it was immoral. But now "nationalism" created these pseudomoralists that bend over backward to justify the morality for extorsion
There is a fallacy that "if only we can get X% more of our budget" we'll fix the government services.
You can't fix the hole by throwing money in it. Efficiently spending the money they already get should be the priority.
Butt... the medicare is unfunded. Well why is it possible to have high-quality medical services in Thailand with international doctors working there, but not in the US with absurdly high/hidden prices for everything? Fix the medical market first, then ask for more money.
The whole argument in this article is backwards...
And btw, the inflation is indeed eating the cash too...
> Because its coins and banknotes don’t leave a paper trail
Slightly off-topic, I've wondered whether serial numbers are captured on bills processed through an ATM. Bill are also put through machines when human tellers receive them at a bank. These days it wouldn't be that hard to track the currency flows, although intermediaries would not be visible.
ATMs with bill serial number readers are available.[1][2] So are back-end systems for full-cycle cash tracking. Supposedly all ATMs in China have this feature.
It's not widely used in the US. It's more common where ATMs take sizable cash deposits, and where ATMs can be used to pay bills with cash. There are cash-recycling ATMs, where deposited bills are read, sorted, and dispensed again. Those often take full pictures of the bills and read serial numbers, since they have to have very good counterfeit detection.
If inflow and outflow are roughly equal, the ATM doesn't need to be serviced as much. US ATMs are mostly outflow, so recycling ATMs are rare.
China and India apparently have more of them.
Right? The purpose of taxes is to curb inflation. The government funds itself with printing money. Taxes are also their to keep you on the treadmill. The fact that the middle class takes the majority load of the tax burden is a feature not a bug.
The government isn't an institution that just can't figure out how to budget properly, there is no need to budget because they are not calculating.
Let's stop calling individuals cheaters. If anyone is a cheater, it's the government due to their reckless moneyprinting leading to substantial inflation. Individuals are the victims.
The comments here are somewhat confused, understandably as the article is too. Cash is really expensive for shops, many digital payment methods cost a fraction. (Not in the US perhaps, but that whole payment system is antique)
The interesting question is how anonymous digital payments will work with stable coins. While in theory perhaps traceable, in practice not doable at scale.
We might be going back to a world with more cash like payments.
Or we could work on more modern forms of cash that make tax evasion harder while preserving privacy.
But sure, I suppose we could also start taxing everybody for the crimes of some instead. But why stop with cash and tax evasion? Just stop charging any monetary fines and increase taxes to make up for the shortfall...
a. How much tax evasion is carried on by cash payments? Certainly they aren't the only way people avoid paying taxes, and I would think that restricting oneself of bills, however high the denomination, would restrict one's scope.
b. I have a $100 bill in my wallet as I write. This is not because I have it in mind to help somebody avoid taxes on goods or services, this is because I missed whatever prompt on the Citibank ATM that allows one to specify "all $20s".
This article makes a false assumption that taxes are both moral and necessary:
> The government needs to fund (via taxes) the services it provides
The problem in the USA is that _barely any_ of our taxes actually provide services. A minuscule tax could easily pay for police/fire/roads. Instead most of the tax revenue goes directly to the pockets of 1%-ers. If the US government were on Charity Navigator, it would have a negative star rating.
Social Security: This popular program eats up 20-25% of total federal spending. It supports retirees, disabled individuals, and survivors. Trump has promised to never cut it. In fact, he wants to eliminate taxes on benefits, which would increase the deficit.
Health care: Think Medicare (for seniors) and Medicaid (for low-income individuals). This is another 25% of the budget. Trump has promised to protect Medicare and a lot of his working-class base benefits from these programs.
Defense: The Defense Department and related military spending constitute about 13-15% of the federal budget. Republicans typically want more defense spending, not less. And it's hard to see the shift to space-based warfare costing less.
Interest on the national debt: This one sucks the most for America because you get nothing in return. Interest payments are growing rapidly, now around 8-10% of federal spending. The only way to save money here is to radically cut the debt. Trump's agenda does the opposite.
Safety-net programs: Programs like food benefits (SNAP), unemployment insurance and housing assistance collectively make up about 10%. Trump won with the support of people who get these benefits, so cuts could be a hard sell."
Huh? The bulk of your local taxes probably funds public schools. As for federal taxes, the bulk is social security, followed by defense, Medicare & Medicaid, and various unemployment benefits.
It can be argued that we should be spending less on defense, but the trade-offs there are very different from what you're describing.
The government also does a fair number of indirect subsidies by making some people or businesses pay less tax, but it's generally not the "top 1%". If you're in the top 1% of earners in California, your total effective tax burden is likely 50% or so.
> The government also does a fair number of indirect subsidies by making some people or businesses pay less tax, but it's generally not the "top 1%".
People with top 1% earned income are overtaxed. But the ones above them, the top 1% by wealth, are undertaxed due to undertaxing property (specifically land and intellectual property).
Undertaxed because the costs of the social order that maintains the security of their property (the military, the police, the courts, and a generally rule abiding society) are all mostly paid for by people who earn income (work for it).
> Instead most of the tax revenue goes directly to the pockets of 1%-ers.
Source?
Give me an example of a single jurisdiction where the majority of the spending is not some combination of police/emergency services, education, and healthcare. And the biggest expenses of those businesses/organizations will be labor costs.
Add defined benefit pension (social security) for US federal government.
All the government budgets should be available online to see. Here is the US federal budget from a couple years ago:
> Those abiding by Walmart’s rules are being asked to make up for a shortfall that is entirely the fault of suit-stealing rule breakers. Honest shoppers who don’t generally like to use invisible suits will be particularly furious — and who can blame them?
If you didn't read the article, the abstract idea of the above quote is the increasing amount of legislation, rules, and regulations levied on society as a whole meant to curtail the actions of a few.
Consider consumer drones: the recent FAA rulemaking utterly handicapped the utility of consumer drones. In my opinion, this is a drastic loss of rights which should have been reserved by the people, not the FAA.
The FAA derives it's authority from congressional mandate to "manage the navigable airspace" and to that end, the FAA will fight court battles to ensure that every square inch of air space is considered navigable. This is representative of government power being handed to an organization and then expanded well beyond "reasonable scope."
A reasonable scope would be to say "well, we cannot legislate that birds and hawks should be ticketed for flying in the navigable airspace, so maybe it's reasonable to condone that part of the airspace (where birds fly). Let's focus on where passenger aircraft fly."
Instead, with no documented catastrophic accidents, your ability to fly a drone has been saddled with ridiculous legislation.
By setting a levy or negative interest rate of 5 to 10 percent per year on high-denomination notes (there are various ways to do this), the government would be able to earn a large-enough stream of revenue to help offset the shortfall created by cash-using tax evaders. The effect would be a lower tax bill for all non-cheaters, both for those who generally do not use cash and those who use only small-denomination notes ($1 and €5s). In effect, the anonymity provided by $100s and €200s would now be directly paid for by the users of those $100s and €200s. Unlike an all-out ban on banknotes, financial anonymity would still be provided.
This is what inflation accomplishes, unless I am misreading something obvious? Keeping money out of financial system and hence anonymized means losing purchasing power to inflation.
Inflation is too uniform, I guess. Why not just take the $100 bill out of circulation?
Also, this seems to be falling into the classic fallacy that sovereign governments which control fiat currencies still levy taxes for revenue. Yes, it keeps things conventional and understandable to think that way, and yes, some forced circulation of currency via taxation is necessary to keep it alive, but broadly speaking, an entity like the U.S. Government does not need to collect tax revenue to function. The purpose of taxation at that level is to shape behavior and so effect policy outcomes via nudging. That still might justify a "high-denomination" bill tax, but let's not kid ourselves about "making up for lost revenue".
Do you mean that the government could merely print money instead of collecting taxes?
That would trigger higher inflation, which would have some very nasty consequences. Assuming you're thinking of the EU or US, it would effectively kill the Dollar / Euro's status as a global currency.
The title of the article is of significant interest, however the article text never tries to assess a price, it just spends a few paragraphs on a goofy analogy trying to describe what the pricing would involve.
- when you exchange a certain amount of cash they are still the same amount after nth passages, when you pay with all common "e-payment" services well, likely at the nth passage you have much, much less due to money exchange fees;
- money are not richness. Money MUST BE just a unit of measure of various substrate, merchandise to use Marx terms. So money could only be exchanged counter goods, because they represent the value of goods, they can't be used alone to create more money, like fractional reserve or private central banks. In the end money could only be created by States paying with them people/companies with salaries, incentives, direct investments where the constrain are natural, human, industrial resources.
Essentially "public debt" it's a centuries old scam people still drink blindly and taxes until money are created as "public debt" in most cases, are just a mean to rob people richness till leaving all except the bank without nothing, sound like the 2030's Agenda "you'll own nothing"... When this happen it's time for a "great reset", a war typically... Does it ring a bell?
Taxes where money are created by the State to push people doing something are a means to redistribute richness to assure that those who do more earn more, otherwise there would be no point in working at all, but still avoid some with too much and others with too little that will break the society and actually we are exactly in a broken society, with some with really much and most with really too little. Yes, the social system is a complex system, so it's not Gaussian, it's hyperbolic, but like so at these levels does not work, there are not enough natural resources to continue this way.
What happen in nature when there are not enough natural resources? Well, many die, potentially till extinction.
The answer then? Distributism. An ancient economic theory, that ensure dynamism ensuring the interest for anyone to move and the possibility for most to decide where to go, because yes, from the old Francis Galton experiments few very skilled people gives better results than some not skilled people, but the near perfect result is the mean of ALL, skilled and unskilled, or the bazaar not the cathedral.
This has something of a muddied and confusing analogy. If you buy Walmart groceries with cash (whether in an invisibility suit or not), VAT is priced into the goods and Walmart is declaring every penny of goods sold to the tax man without having to track who bought them.
Also, in terms of government focus, it gets most of its tax revenue from high earners - "the 1%" pay 45.8% of US taxes. The top 10% pay 75.8% of US taxes. These high earners make most of their money through ownership rather than labour, and ownership inherently has a paper trail; stable government and rule of law guarantees the legitimacy of their ownership claims. How much do they think is missing from unreported income, compared to how much is missing because US corporations hold their earnings in offshore accounts?
> Also, in terms of government focus, it gets most of its tax revenue from high earners - "the 1%" pay 45.8% of US taxes. The top 10% pay 75.8% of US taxes.
45.8% of US Federal Income Tax, which is only 57% of the total tax paid by individuals to the feds (the other 43% is FICA).
And it gets even muddier if you include sales tax, property tax, etc (which is paid to government, just not federal government)
> Banknotes are useful. Not only do they provide their owner with a standard set of payments services, they also offer financial anonymity.
> The product is weaponized and turned against its provider. This same sort of weaponization characterizes the modern provision of banknotes. The government, like Walmart, provides citizens with a privacy-enhancing product: cash.
This article has a strange fixation on the anonymous aspect of cash. It's almost suggesting that it's morally wrong to use cash (though we seem to tolerate it in society), and that non-anonymous alternatives that are tracked are better.
Let me give several arguments for why cash is beneficial even if you ignore anonymity:
0) Payments are final. Once you handed over cash, it cannot be taken back - unlike cheques and electronic money transfers, where you can claim "it was fraud" and ask the bank to reverse the payment. This gives the receiver a fairly strong guarantee of payment (except for counterfeit cash).
1) Payments are limited. Once you paid the cash and walk away, the receiver cannot take more money out of your wallet. This is unlike cheques and credit cards, where the receiver could use the account numbers to charge you more money anytime later.
2) No censorship. Look at the categories of goods and services that Visa and Mastercard ban. You might not agree with all of them. You might not be happy about future changes in rules.
3) No tolling. For the privilege of spending money on a credit card, the credit card company charges ~2% to the merchant, who in turn raises prices on the goods that you buy. Other payment methods like cheques, debit, bank transfers, wire transfers, etc. have other fee structures (generally much less than credit cards), but the fact that these payments are intermediated by financial companies means that they could charge arbitrary fees to you for transferring your money.
Here's another one:
4) It's offline, and works in the absence of electric power. Even if you're in a tiny village deep in the middle of the Amazon forest, you can still pay for things with cash.
it's also useful when power is cut, for example in case of natural disaster (I just saw today a video on Waffle House, where their disaster playbook mentioned just that)
Some other nice things about cash:
- It's useful with children. A concrete representation of value is tangible compared to an abstract number in a bank account.
- It's great for gifts
- It's harder to refuse: I've had a restaurant make a mistake and then refuse to charge me. I left cash on the table when I left.
> It's useful with children. A concrete representation of value is tangible compared to an abstract number in a bank account.
I hear this often, but I'm not at all convinced it's true.
And even if it were: Children will eventually grow up and have to manage their non-cash finances at some point. Why not teach them early?
I've had a checking account and debit card since I was 10 years old, and subjectively this has only contributed to being able to treat "abstract" and physical money as exactly the same from a budgeting point of view.
> It's great for gifts
For in-person gifts. Sending it in the mail is usually a bad idea, as I've personally experienced too often in my life.
Also, at least in the US, there seems to be some weird stigma against cash gifts that's created a huge industry of Visa/Mastercard gift cards with horrendous fees and a high chance of falling victim to some kind of scam.
> I've had a checking account and debit card since I was 10 years old
I dare you to teach a 4 or 5 year old to use one!
Do you think they'd fare much better with budgeting physical cash?
I certainly didn’t. I remember getting cash as a young child, thinking with $20 I was “rich”, and rapidly blowing it on Sim City.
I only understood the value of money once I both had a bank account and a job that funded it.
> It's almost suggesting that it's morally wrong to use cash
Quite the opposite actually, it emphasizes the importance of such anonymity but also acknowledges that it also comes with problems for society.
> 0) Payments are final. Once you handed over cash, it cannot be taken back
First this isn't true, as most good comes with legal guarantee, retraction rights and so on. And then the near-final aspect of cash is also the reason why armed robberies works. (And yes I said near final, because the police routinely seize cash from people who got it illegally).
> 3) No tolling.
Cash is extremely expensive to handle for banks, and even if they don't charge you directly, they definitely factor this cost in what they charge to all their customers (business and individuals alike).
> Quite the opposite actually, it emphasizes the importance of such anonymity but also acknowledges that it also comes with problems for society.
I think this is just a tongue-in-cheek argument by the author. The article suggests adding a penalty for using cash, which, given the highly competitive payments landscape, will effectively accelerate the phase-out.
Cynically, this could be read as making payment privacy exclusive to the better off, which has its own highly problematic implications.
Purely from the perspective of raising more government funds, I can understand their argument. But from that perspective, I think there are better, less disruptive ways for governments to extract value from the payments system.
> First this isn't true, as most good comes with legal guarantee, retraction rights and so on.
Finality of the underlying transaction is a different concern than that of the means of payment.
Cash is indeed, at least in some jurisdictions, the only thing you can be sure to not have taken away from you when acquired bona fide, even if it turns out to have originally been stolen from its legitimate owner.
Practically, some other payment methods have similar guarantees, though (for example, you generally can't have money clawed back as a merchant accepting credit or debit cards in person).
Would you say that most of the benefits you attribute to cash can only be realized electronically using cryptocurrencies?
None of those qualities are true of crypto currency. It is not anonymous with bitcoin, it is not final as with tether, and KYC makes it not censorship resistant either. And for all this it has fairly high tolls too. Crypto is not a currency used for trade except illegal trade. It is a greater fool scheme.
I've made purchases with monero that were anonymous and final. From memory the transaction fee was something like 10c. Worth every penny.
Tolling on cryptocurrencies is absurdly high.
About 6c per transaction on monero.
https://bitinfocharts.com/comparison/monero-transactionfees....
I paid multiple orders higher fees when I bought lunch today.
In most developed countries outside the US, electronic bank transfers and payments fulfil 1 and 3.
> But an across-the-board price increase hardly seems fair. Those abiding by Walmart’s rules are being asked to make up for a shortfall that is entirely the fault of suit-stealing rule breakers. Honest shoppers who don’t generally like to use invisible suits will be particularly furious — and who can blame them? They are being asked to pay more for the goods they hold dear in order to support the use of a single product they never cared for much anyway.
The generic form of this argument is that you put a tax on stealing in general. But we already have that; it's the laws against stealing (or tax evasion).
Obviously you can still be caught for tax evasion even if you're using cash. The counterparty can report you and the IRS pays rewards for that sort of thing. Law enforcement can notice that you're living in a mansion and have six cars while reporting no income and investigate how you're paying for it. Moreover, that puts the cost on the people actually evading taxes, instead of on all the innocent people using the anonymous payment method. And isn't the point here supposed to be to not impose costs on innocent people, and to deter tax evasion rather than deterring privacy?
Also notice that even the proposed system already exists. If you have digital money in a bank you get interest (CD rates currently ~5% APY), if you have cash in a mattress you don't. But people using cash to evade taxes don't have to stick it in a mattress anyway; they can just spend it immediately, which is what they already do because of the existing incentives.
So, the idea is to make one of the stronger methods of avoiding being spied on to be a privilege only available to people with enough means to be able to pay for it?
This is directly backward from the way it should work. You shouldn't have to incur a formal financial penalty just because you want to minimize the amount of spying you're subjected to.
This has implications for more than just the inability of the poor to have any privacy. If you impose a deterrent to the anonymous payment method then it becomes less widely used and less widely supported, creating more barriers for the people with sufficient legitimate need for anonymity that they would suffer the additional fee in itself, and making them stand out more.
There was a time that taxes were extorted through force by strongmen and it was immoral. But now "nationalism" created these pseudomoralists that bend over backward to justify the morality for extorsion
You want to live somewhere outside of civilization and not pay taxes?
also see "pay for indulgences" for a preview of Chapter 2
There is a fallacy that "if only we can get X% more of our budget" we'll fix the government services. You can't fix the hole by throwing money in it. Efficiently spending the money they already get should be the priority.
Butt... the medicare is unfunded. Well why is it possible to have high-quality medical services in Thailand with international doctors working there, but not in the US with absurdly high/hidden prices for everything? Fix the medical market first, then ask for more money.
The whole argument in this article is backwards...
And btw, the inflation is indeed eating the cash too...
Printing money is a tax on cash (and other uninvested funds.)
> Because its coins and banknotes don’t leave a paper trail
Slightly off-topic, I've wondered whether serial numbers are captured on bills processed through an ATM. Bill are also put through machines when human tellers receive them at a bank. These days it wouldn't be that hard to track the currency flows, although intermediaries would not be visible.
ATMs with bill serial number readers are available.[1][2] So are back-end systems for full-cycle cash tracking. Supposedly all ATMs in China have this feature.
It's not widely used in the US. It's more common where ATMs take sizable cash deposits, and where ATMs can be used to pay bills with cash. There are cash-recycling ATMs, where deposited bills are read, sorted, and dispensed again. Those often take full pictures of the bills and read serial numbers, since they have to have very good counterfeit detection.
If inflow and outflow are roughly equal, the ATM doesn't need to be serviced as much. US ATMs are mostly outflow, so recycling ATMs are rare. China and India apparently have more of them.
[1] https://www.glory-global.com/-/media/GloryGlobal/Downloads/E...
[2] https://atm.icard.com/en/smart
Wouldn't it be hard as soon as people exchange that money in non traceable areas?
E.g. people gift money on birthdays, people buy things in private sales, etc.
Edit: overlooked your last part about intermediates you are right
even if they were, you can't prove that the cash transfer was part of a taxable transaction
> the effect would be a lower tax bill for all non-cheaters
Hahahaha. This is not how governments work. At all.
Right? The purpose of taxes is to curb inflation. The government funds itself with printing money. Taxes are also their to keep you on the treadmill. The fact that the middle class takes the majority load of the tax burden is a feature not a bug.
The government isn't an institution that just can't figure out how to budget properly, there is no need to budget because they are not calculating.
Let's stop calling individuals cheaters. If anyone is a cheater, it's the government due to their reckless moneyprinting leading to substantial inflation. Individuals are the victims.
The comments here are somewhat confused, understandably as the article is too. Cash is really expensive for shops, many digital payment methods cost a fraction. (Not in the US perhaps, but that whole payment system is antique)
The interesting question is how anonymous digital payments will work with stable coins. While in theory perhaps traceable, in practice not doable at scale.
We might be going back to a world with more cash like payments.
Or we could work on more modern forms of cash that make tax evasion harder while preserving privacy.
But sure, I suppose we could also start taxing everybody for the crimes of some instead. But why stop with cash and tax evasion? Just stop charging any monetary fines and increase taxes to make up for the shortfall...
a. How much tax evasion is carried on by cash payments? Certainly they aren't the only way people avoid paying taxes, and I would think that restricting oneself of bills, however high the denomination, would restrict one's scope.
b. I have a $100 bill in my wallet as I write. This is not because I have it in mind to help somebody avoid taxes on goods or services, this is because I missed whatever prompt on the Citibank ATM that allows one to specify "all $20s".
From the title of the article, I was really hoping to hear about an experiment to discover the value people placed on their privacy.
The article has a top-down idea for reducing the use of large bills, but no mention of a price-discovery mechanism.
Are you aware of any work in this vein?
What a perverse world view. The writer thinks we exist because the government allows us to exist. What an idiot.
This article makes a false assumption that taxes are both moral and necessary:
> The government needs to fund (via taxes) the services it provides
The problem in the USA is that _barely any_ of our taxes actually provide services. A minuscule tax could easily pay for police/fire/roads. Instead most of the tax revenue goes directly to the pockets of 1%-ers. If the US government were on Charity Navigator, it would have a negative star rating.
The hilarious part of the replies here of people naming the program splits think the said programs actually go too citizens.
Instead what you get is the EPA under contract buying $6k office chairs.
This is completely false. Go back to getting real data.
"For Social Security, for example, administrative overhead is about 0.5% of total spending."
https://www.axios.com/2024/11/20/government-spending-musk-tr...
More here: https://www.axios.com/2024/11/16/elon-musk-trump-department-...
"The vast majority of spending goes to:
Social Security: This popular program eats up 20-25% of total federal spending. It supports retirees, disabled individuals, and survivors. Trump has promised to never cut it. In fact, he wants to eliminate taxes on benefits, which would increase the deficit.
Health care: Think Medicare (for seniors) and Medicaid (for low-income individuals). This is another 25% of the budget. Trump has promised to protect Medicare and a lot of his working-class base benefits from these programs.
Defense: The Defense Department and related military spending constitute about 13-15% of the federal budget. Republicans typically want more defense spending, not less. And it's hard to see the shift to space-based warfare costing less.
Interest on the national debt: This one sucks the most for America because you get nothing in return. Interest payments are growing rapidly, now around 8-10% of federal spending. The only way to save money here is to radically cut the debt. Trump's agenda does the opposite.
Safety-net programs: Programs like food benefits (SNAP), unemployment insurance and housing assistance collectively make up about 10%. Trump won with the support of people who get these benefits, so cuts could be a hard sell."
Huh? The bulk of your local taxes probably funds public schools. As for federal taxes, the bulk is social security, followed by defense, Medicare & Medicaid, and various unemployment benefits.
It can be argued that we should be spending less on defense, but the trade-offs there are very different from what you're describing.
The government also does a fair number of indirect subsidies by making some people or businesses pay less tax, but it's generally not the "top 1%". If you're in the top 1% of earners in California, your total effective tax burden is likely 50% or so.
> The government also does a fair number of indirect subsidies by making some people or businesses pay less tax, but it's generally not the "top 1%".
People with top 1% earned income are overtaxed. But the ones above them, the top 1% by wealth, are undertaxed due to undertaxing property (specifically land and intellectual property).
Undertaxed because the costs of the social order that maintains the security of their property (the military, the police, the courts, and a generally rule abiding society) are all mostly paid for by people who earn income (work for it).
Doesn’t the plurality of spending go to medicare and social security?
> Instead most of the tax revenue goes directly to the pockets of 1%-ers.
Source?
Give me an example of a single jurisdiction where the majority of the spending is not some combination of police/emergency services, education, and healthcare. And the biggest expenses of those businesses/organizations will be labor costs.
Add defined benefit pension (social security) for US federal government.
All the government budgets should be available online to see. Here is the US federal budget from a couple years ago:
https://www.thebalancemoney.com/u-s-federal-budget-breakdown...
And here is the biggest state:
https://ebudget.ca.gov/budget/2024-25EN/#/BudgetDetail
The biggest city (page 11):
https://openbudget.ny.gov/overview.html
The biggest county:
https://file.lacounty.gov/SDSInter/lac/1168728_2024-25FinalA...
> Those abiding by Walmart’s rules are being asked to make up for a shortfall that is entirely the fault of suit-stealing rule breakers. Honest shoppers who don’t generally like to use invisible suits will be particularly furious — and who can blame them?
If you didn't read the article, the abstract idea of the above quote is the increasing amount of legislation, rules, and regulations levied on society as a whole meant to curtail the actions of a few.
Consider consumer drones: the recent FAA rulemaking utterly handicapped the utility of consumer drones. In my opinion, this is a drastic loss of rights which should have been reserved by the people, not the FAA.
The FAA derives it's authority from congressional mandate to "manage the navigable airspace" and to that end, the FAA will fight court battles to ensure that every square inch of air space is considered navigable. This is representative of government power being handed to an organization and then expanded well beyond "reasonable scope."
A reasonable scope would be to say "well, we cannot legislate that birds and hawks should be ticketed for flying in the navigable airspace, so maybe it's reasonable to condone that part of the airspace (where birds fly). Let's focus on where passenger aircraft fly."
Instead, with no documented catastrophic accidents, your ability to fly a drone has been saddled with ridiculous legislation.
The biggest tax evaders don't use cash anyways, it's all targeted at little people that happen to win $50 here and there, like our baby sitter.
By setting a levy or negative interest rate of 5 to 10 percent per year on high-denomination notes (there are various ways to do this), the government would be able to earn a large-enough stream of revenue to help offset the shortfall created by cash-using tax evaders. The effect would be a lower tax bill for all non-cheaters, both for those who generally do not use cash and those who use only small-denomination notes ($1 and €5s). In effect, the anonymity provided by $100s and €200s would now be directly paid for by the users of those $100s and €200s. Unlike an all-out ban on banknotes, financial anonymity would still be provided.
This is what inflation accomplishes, unless I am misreading something obvious? Keeping money out of financial system and hence anonymized means losing purchasing power to inflation.
Inflation is too uniform, I guess. Why not just take the $100 bill out of circulation?
Also, this seems to be falling into the classic fallacy that sovereign governments which control fiat currencies still levy taxes for revenue. Yes, it keeps things conventional and understandable to think that way, and yes, some forced circulation of currency via taxation is necessary to keep it alive, but broadly speaking, an entity like the U.S. Government does not need to collect tax revenue to function. The purpose of taxation at that level is to shape behavior and so effect policy outcomes via nudging. That still might justify a "high-denomination" bill tax, but let's not kid ourselves about "making up for lost revenue".
Do you mean that the government could merely print money instead of collecting taxes?
That would trigger higher inflation, which would have some very nasty consequences. Assuming you're thinking of the EU or US, it would effectively kill the Dollar / Euro's status as a global currency.
> broadly speaking, an entity like the U.S. Government does not need to collect tax revenue to function
Really?
https://fiscaldata.treasury.gov/americas-finance-guide/gover...
> The primary sources of revenue for the U.S. government are individual and corporate taxes
Wouldn't it do almost nothing if it did not collect tax revenue such as income tax and land tax?
The title of the article is of significant interest, however the article text never tries to assess a price, it just spends a few paragraphs on a goofy analogy trying to describe what the pricing would involve.
Potentially great subject, pretty poor article...
...Are you sure you want to push money launderers more into crypto? Cause that's all you'll be achieving using this.
Good for me, I'm still holding some XMR :-)
I note few simple things:
- when you exchange a certain amount of cash they are still the same amount after nth passages, when you pay with all common "e-payment" services well, likely at the nth passage you have much, much less due to money exchange fees;
- money are not richness. Money MUST BE just a unit of measure of various substrate, merchandise to use Marx terms. So money could only be exchanged counter goods, because they represent the value of goods, they can't be used alone to create more money, like fractional reserve or private central banks. In the end money could only be created by States paying with them people/companies with salaries, incentives, direct investments where the constrain are natural, human, industrial resources.
Essentially "public debt" it's a centuries old scam people still drink blindly and taxes until money are created as "public debt" in most cases, are just a mean to rob people richness till leaving all except the bank without nothing, sound like the 2030's Agenda "you'll own nothing"... When this happen it's time for a "great reset", a war typically... Does it ring a bell?
Taxes where money are created by the State to push people doing something are a means to redistribute richness to assure that those who do more earn more, otherwise there would be no point in working at all, but still avoid some with too much and others with too little that will break the society and actually we are exactly in a broken society, with some with really much and most with really too little. Yes, the social system is a complex system, so it's not Gaussian, it's hyperbolic, but like so at these levels does not work, there are not enough natural resources to continue this way.
What happen in nature when there are not enough natural resources? Well, many die, potentially till extinction.
The answer then? Distributism. An ancient economic theory, that ensure dynamism ensuring the interest for anyone to move and the possibility for most to decide where to go, because yes, from the old Francis Galton experiments few very skilled people gives better results than some not skilled people, but the near perfect result is the mean of ALL, skilled and unskilled, or the bazaar not the cathedral.
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This has something of a muddied and confusing analogy. If you buy Walmart groceries with cash (whether in an invisibility suit or not), VAT is priced into the goods and Walmart is declaring every penny of goods sold to the tax man without having to track who bought them.
Also, in terms of government focus, it gets most of its tax revenue from high earners - "the 1%" pay 45.8% of US taxes. The top 10% pay 75.8% of US taxes. These high earners make most of their money through ownership rather than labour, and ownership inherently has a paper trail; stable government and rule of law guarantees the legitimacy of their ownership claims. How much do they think is missing from unreported income, compared to how much is missing because US corporations hold their earnings in offshore accounts?
> Also, in terms of government focus, it gets most of its tax revenue from high earners - "the 1%" pay 45.8% of US taxes. The top 10% pay 75.8% of US taxes.
45.8% of US Federal Income Tax, which is only 57% of the total tax paid by individuals to the feds (the other 43% is FICA).
And it gets even muddier if you include sales tax, property tax, etc (which is paid to government, just not federal government)