Submitted via IRC for Bytram
British Prime Minister Theresa May and Indian Prime Minister Narendra Modi are among the world leaders who've expressed alarm at the rise of virtual cash to move money offshore. The U.S. Congress held hearings this month, and Treasury Secretary Steven Mnuchin called on the world's 20 biggest economies to work together to make sure cryptocurrencies don't "become the next Swiss bank account." The concern comes after a successful international crackdown on tax havens in traditional banking.
"Every country is scrambling to come up with an answer," said Drake, who serves on the boards of 25 public and private companies. "There needs to be a regulated structure that won't kill the industry."
The earliest adopters of the practice were criminals, and their involvement has risen steadily, according to a three-year study by the Foundation for Defense of Democracies, a non-partisan Washington think tank. Next came users like Drake, who said he follows U.S. law by reporting his companies' holdings. Drake said better oversight would help legitimize the industry.
(Score: 0) by Anonymous Coward on Wednesday January 31 2018, @11:18AM
That would be horrible! Kill Dark Web.
(Score: 5, Insightful) by bradley13 on Wednesday January 31 2018, @11:40AM (12 children)
There's an underlying assumption here - one that we really should question: Do governments have the right to know all of the details of your personal finances? Why?
The only - absolutely only - reason that this is necessary, is for taxation.
However, the more important question is this: Why should the government not require probable cause? For anything else, if the government suspects you of wrongdoing, it gets a warrant in order to invade your privacy. Why should taxation be different? If you claim to owe no taxes, but drive a Ferrari, the government has probable cause. Otherwise, not, so none of their business.
"But so many people would cheat!" Which is undoubtedly true. That indicates, to me, that governments have chosen a poor tax model. Other models are possible. Just as an example: if the government only funded itself through VAT, it would be completely unnecessary for governments to know people's financial details.
Everyone is somebody else's weirdo.
(Score: 5, Touché) by Virindi on Wednesday January 31 2018, @11:51AM
What are you talking about?!???
Knowing everything about everyone is an end in itself! The fact that the tax model "just so happens" to need this, what a happy coincidence! :)
(Score: 1, Insightful) by Anonymous Coward on Wednesday January 31 2018, @12:00PM (1 child)
or forget taxes and just use VAT for everything, ALL THE TIME?
imagine the energy saving ...
(Score: 2) by realDonaldTrump on Friday February 02 2018, @01:37AM
The VAT is a tax. It's a terrible, terrible tax. At Trump Golf Scotland we pay it on everything we sell! It's a big reason why the EU is failing badly.
(Score: 4, Interesting) by Geezer on Wednesday January 31 2018, @12:13PM (3 children)
I quite agree, but there's more to it. Governments see cryptocurrencies as just another form of cash flow indistinguishable from banking or commerce.
I'm unfamiliar with the tax mechanics in other countries, but the requirements involved in merely filing tax forms in the US is an exercise in data gathering. A Form 1040 filing is an annual profile update. If the Treasury bureaucrats feel like it, they have investigative prerogatives that require no probable cause beyond a mere hunch or a grudge. Never annoy or defy the IRS has long been the word.
To claim a personal tax deduction, one must file detailed supporting paperwork. Medical bills, real estate transactions, capital gains from investments, and employment expenses are some of the more common windows into the life of the average long-form taxpayer. They penalize simplified "EZ" tax form filers by simply not allowing certain deductions.
The US tax code is also the government's financial carrot and stick when it comes to behavior modification.
You are correct that a VAT, or even a so-called "flat tax" system, would obviate the need for such detailed intrusiveness. However, as a matter of Realpolitik, have you ever known any government to willingly give up any form of surveillance or coercion?
(Score: 1) by bobthecimmerian on Wednesday January 31 2018, @02:22PM (2 children)
You say that, but for example with the tax code changes in the US in 2018 the government will be collecting less information from most citizens than it did before. The standard deductions double, and my family is one of the tens of millions in which our annual itemized deductions won't add up to the doubled standard deduction. I'll just file with the standard deduction, so the government will no longer have right on one form my state taxes, mortgage interest, medical expenses in excess of some percentage of adjusted gross income (I forget the percent), student loan payments, and so forth. So that's good.
On the downside, if our household gross income was $50k lower our US federal income taxes for 2018 would be $1,000-$3,000 lower than they were for 2017. And if our gross income was $100k higher our US federal income taxes for 2018 would be $9,000 lower than they were for 2017. But at our income level, the loss of the personal exemption more than offsets the reduced tax brackets so we'll pay $1,000-$3,000 more in taxes for 2018 than we did for 2017. I'm less annoyed by the slight bump in our taxes than I am by the fact that the tax liability for my boss and her boss and so forth all of the way up the corporate food chain are dropping while mine is going up.
(Score: 2) by Runaway1956 on Wednesday January 31 2018, @11:04PM (1 child)
Yes, and that is just crazy. If a graduated tax is justified, at all, why not graduate it from top to bottom, in a uniform manner? The rich can get away with paying nothing, or very nearly nothing. The poor pay nothing, and usually get free money back. The working people near the middle get the shaft. And, double shafted if they dare to work overtime! My first year out of high school, I learned that working any more than 53 hours actually meant taking home LESS MONEY. I can't remember the numbers now, but I got diminishing returns between 45 and 50 hours - from 50 to 53 I took home the same money that I would have taken home at 48 or 49. At 53 hours, my net take home paycheck got SMALLER!
That cutoff has moved a little over the years, but it's still there. Work too many hours, and you actually paying the government for the privilege of working. Unless, maybe, at the end of the year, you have dependents to claim that help to get it all back.
(Score: 1) by bobthecimmerian on Thursday February 01 2018, @12:16PM
The 2018 tax changes in the US double the standard deduction but eliminate deductions for dependents. That's why my taxes are going up, I have four kids.
To be fair, our household income is somewhat north of 100k. If it was 100k we would be getting a small tax cut and if it was 50k we would be getting a significant one. But if my wife and I were doctors the tax break is enormous.
(Score: 2) by crafoo on Wednesday January 31 2018, @02:13PM
Thank you. This is what we should be discussing. The answer is NO. They do not. Free men conduct business as they wish and without the need for "big daddy and mommy" oversight. If you are a suspected criminal and they have a warrant? Fine, obviously in that particular case they need to follow the money. But that isn't an excuse to force everyone under surveillance. No, that's the point at which they have to start doing police work. It's hard work and it takes warm bodies with able minds. That is what freedom demands. That is part of the price we will pay. Yes, this also means they will need to prioritize their targets. Again, this is probably for the best.
(Score: 1, Interesting) by Anonymous Coward on Wednesday January 31 2018, @02:40PM (1 child)
I guess you care more about financial privacy than crime. Here is an alternative proposal: Every financial transaction should be published for full transparency. Corporate ownership rules should make it clear who controls and benefits from shell companies.
(Score: 2) by Runaway1956 on Wednesday January 31 2018, @11:09PM
That's kinda cool - for corporations. Make everything transparent, I don't care. But, you and me? We are private citizens. We don't make payroll, we don't pollute the environment, we don't shuffle hazardous materials from one plant to another, we don't contribute much if any to noise and light pollution, we don't discriminate against groups of people with our hiring practices - on and on it goes. I'm a private citizen, and it is none of my congress critter's business whether I made $10,000, $100,000, or $1,000,000 this year. On the other hand, IT IS MY BUSINESS how much money HE MADE.
(Score: 0) by Anonymous Coward on Wednesday January 31 2018, @02:47PM
> For anything else, if the government suspects you of wrongdoing, it gets a warrant in order to invade your privacy.
:/
(Score: 0) by Anonymous Coward on Wednesday January 31 2018, @02:49PM
Assuming you are American living in Switzerland. How is it having to report on your local account activity, and having hassles finding a bank willing to open an account for a person of suspected US citizenship. Even if you renounce your citizenship, you can never escape that due to your place of birth.
(Score: 1, Insightful) by Anonymous Coward on Wednesday January 31 2018, @11:43AM (17 children)
Have there been any proposals to collect taxes that don't require creepily spying on everything people do? I get the sense at this point that the taxes are even an excuse for the spying rather than vice versa. What about getting rid of taxes altogether and funding governments purely via printing money and inflation?
(Score: 5, Interesting) by The Mighty Buzzard on Wednesday January 31 2018, @12:03PM (15 children)
How about this instead? Governments work for their money like the rest of us. What are governments good at? Blowing things the fuck up mostly but they seem to think they're good at managing enormous projects too. How about they start fairly competing for infrastructure projects? It's not a difficult proposition. You give an independent agency N dollars worth of startup capital and tell them "go build shit and put all profits in the treasury". Simple, yeah?
Hell, for that matter let them take the independent agency with startup capital model and get into whatever the hell industry they feel like. So long as they're not allowed to dip unfairly into unlimited government coffers or get preferential laws, it's perfectly fair and even good capitalistic competition. And it would mean they stay the fuck out of my wallet.
Or even give the public a chance to put their money where their mouths are if they think the government's so good at managing shit. Allow initial public investment instead of printing startup capital. Then pay half the profits to the treasury and half the profits to the investors.
My rights don't end where your fear begins.
(Score: 4, Insightful) by Geezer on Wednesday January 31 2018, @12:19PM (6 children)
Interesting concept, but given the failure rate of startups and .gov's brilliant management track record, the startup capital would eventually just add to the national debt. Government agencies can't file bankruptcy. Would that they could.
(Score: 2) by Geezer on Wednesday January 31 2018, @12:26PM
Before somebody brings up "what about Detroit?", you need to distinguish entities from agencies. A city, as an entity, can file for bankruptcy, but a city agency, like a sewer department, cannot.
(Score: 3, Interesting) by The Mighty Buzzard on Wednesday January 31 2018, @12:33PM (4 children)
Which is why you make them independent entities. If they fail they file bankruptcy and the government picks something else or tries again with different management. Startups generally fail for either having a bloody stupid idea, bad management, or because of not enough backing. The latter would not be the case for a government-seeded startup and the others would mean they need to fail. The key here is you don't let Congress touch them in any way after they're initially funded.
As for the national debt? Give the program a while to get on its feet then stop allowing deficit spending at all. If Congress wants money for a rainy day, they can save it like the rest of us.
My rights don't end where your fear begins.
(Score: 0) by Anonymous Coward on Wednesday January 31 2018, @08:07PM (1 child)
Most government agencies have no method of generating a profit. So unless you want to go full Ferengi and turn life into a massive set of micro-payments I suggest you take a good hard look at your Church of Capital Gains.
(Score: 2) by The Mighty Buzzard on Wednesday January 31 2018, @10:24PM
You don't read so well, do you?
My rights don't end where your fear begins.
(Score: 2) by bob_super on Wednesday January 31 2018, @10:12PM (1 child)
> stop allowing deficit spending at all. If Congress wants money for a rainy day, they can save it like the rest of us.
The (Keynesian) point of deficit spending is to deal with a crisis situation, because raw capitalism really sucks at preventing major recessions from turning into full-blown depressions.
The problem with deficit spending is that politicians love to give tax cuts as soon as the economy perks up (W, Trump), rather than follow that second part of the theory which calls for paying off your debts before the next rainy day.
Actually saving ? You must be joking ! A rainy day fund is stolen taxpayer money!
(Score: 2) by The Mighty Buzzard on Wednesday January 31 2018, @10:25PM
Right now it would be stolen money, yes. If they had to earn it, it would not be.
My rights don't end where your fear begins.
(Score: 2) by VLM on Wednesday January 31 2018, @12:31PM (1 child)
Isn't that like, the small business administration dept?
Of course the original goal is perverted into handing out money based on racism and sexism and other social engineering criteria, no longer interested in the original goal. Preventing your proposed dept from degenerating into what happened to the SBA would be interesting.
(Score: 2) by The Mighty Buzzard on Wednesday January 31 2018, @12:36PM
Not really. Those are loans. I'm talking outright ownership. Just by holding non-voting stock. If they want to waste their primary source of income when they're not allowed to just print money or raise taxes anymore, let them.
My rights don't end where your fear begins.
(Score: 0) by Anonymous Coward on Wednesday January 31 2018, @01:17PM (1 child)
They did in the past... but some people found that to socialist/communist/against the "free" market, so governments were forced to sell these.
(Score: 2) by The Mighty Buzzard on Wednesday January 31 2018, @01:24PM
Thus the independent entity stipulation. If it can't dip into government coffers and is legally prohibited from getting preferential treatment, it's all happy capitalism again. Mind you, this is an off the top of my head idea. It undoubtedly needs some fleshing out.
My rights don't end where your fear begins.
(Score: 1, Touché) by Anonymous Coward on Wednesday January 31 2018, @04:29PM (1 child)
you just need to understand that governments work like we do but they do work for that 1% of the 1%
(Score: 2) by The Mighty Buzzard on Wednesday January 31 2018, @06:24PM
Being able to print your own money at will without going to prison is not "like we do".
My rights don't end where your fear begins.
(Score: 0) by Anonymous Coward on Wednesday January 31 2018, @09:15PM (1 child)
You mean like the Federal Reserve? That turned out well. (/sarcasm)
(Score: 2) by bob_super on Wednesday January 31 2018, @10:22PM
The Fed isn't a perfect system, but do you realize how much "taxes" they make banks pay ?
https://www.federalreserve.gov/newsevents/pressreleases/other20180110a.htm [federalreserve.gov]
(Score: 0) by Anonymous Coward on Wednesday January 31 2018, @02:49PM
well a purely technical solution is gnu taler
(Score: 5, Interesting) by VLM on Wednesday January 31 2018, @12:29PM
These two lines next to each other are weird
So, they're worried that BTC will become as monitored and reported as swiss bank accts in this century? Kinda changes the tone of the story like "I don't want the press to learn about my secret politician BTC bribes like they could easily learn about swiss accts this century".
Its not cops worried, its crooks worried. A bit of a turn about.
(Score: 4, Interesting) by crafoo on Wednesday January 31 2018, @02:20PM (9 children)
The promise of cryptocurrency is decentralized banking. That means everyone gets control back of the monetary system and it is not run by a central banking authority. I think a key to it' success will be the removal of government oversight. There really is no reason for their involvement. I know they have grown accustomed to their role, as well as have the credit card agencies and central banks.
My hope though is the future is people making deals as they see fit, as interactions between two private parties.
This won't be the end to criminal investigations. There are other ways. It may require more work. Don't care. It's worth the price.
This isn't the end to taxes. There are other ways. Government interjecting itself into every transaction is a recent thing and certainly not the norm over civilization.
(Score: 3, Informative) by bobthecimmerian on Wednesday January 31 2018, @02:27PM (4 children)
I would add that one of the goals of cryptocurrency is cutting out the parasites in the middle. If Bitcoin or Bitcoin Cash or Ethereum or Zcash or whatever becomes so popular that you can spend it from your smart phone or laptop, then I can pay my auto mechanic or my grocery bill without giving Visa or Bank of America or both a piece of the transaction.
It may not seem like a big deal, but it adds up over time.
(Score: 1, Interesting) by Anonymous Coward on Wednesday January 31 2018, @02:42PM (3 children)
> without giving Visa or Bank of America or both a piece of the transaction
Careful there -- the piece of the transaction you give Visa or BoA goes toward running the servers, and paying the people who run the servers, and generally keep the infrastructure running.
With cryptocurrencies, you're also going to have to give up a piece of the transaction. Right now, at least with Bitcoin, it's actually *worse* than Visa/BoA. The piece of the transaction you're expected to give up is more like an auction than a flat fee, and can run as high as $30 per transaction. And the infrastructure probably wastes *more* than that in electricity, so right now Bitcoin is a net loss on the entire planet.
I really like the part where it's decentralized, but I'm not sure the current implementation is sustainable...
(Score: 0) by Anonymous Coward on Wednesday January 31 2018, @03:42PM
Acutally, plenty of transactions are going through for pennies these days, even some free ones are going through:
https://bitcoinfees.earn.com/ [earn.com]
The fee problem is gone.
(Score: 1, Insightful) by Anonymous Coward on Wednesday January 31 2018, @05:22PM
even without built in anonymization, btc is still more private than using CC companies
(Score: 1) by bobthecimmerian on Thursday February 01 2018, @12:19PM
I agree the original Bitcoin doesn't solve this problem, for the exact reasons you state. But many of the other newer cryptocurrencies made changes from Bitcoin specifically to address these classes of problems - faster transactions, lower fees, and in some cases much more energy-efficient algorithm designs.
(Score: 3, Informative) by Thexalon on Wednesday January 31 2018, @04:19PM (3 children)
Thing is, we've been there before. Back in the days before central banking, anybody could print up bank notes, and it was up to each individual to decide which bank notes to accept. The result was chaotic at best: Counterfeiters had a very easy time making fake bank notes, and merchants were constantly having to decide whether to trust the bank notes from, say, someone visiting from out of town. And as for the banks, the notes were in theory exchangeable for gold at that bank, but since there was little-to-no banking regulation and thus no reason for banks not to issue far more notes than they had gold. Which meant even legitimately issued bank notes could in fact be worthless pieces of paper, and also meant that any bank with a debt problem would have every incentive to print up a bunch of worthless notes to pay their debt in to at least kick the can down the road while they scrambled to come up with gold or something else of actual value.
A rough modern equivalent is personal checks, except back then the personal checks had no standardization whatsoever and none of the modern fast check processing so you know it will clear and you know it's a real bank account. And even in those cases, merchants lose out every year from bad or fake checks.
Central banking isn't perfect, but it was created to solve real problems. And it has mostly solved those problems.
The only thing that stops a bad guy with a compiler is a good guy with a compiler.
(Score: 0) by Anonymous Coward on Wednesday January 31 2018, @05:27PM (1 child)
"Central banking isn't perfect, but it was created to solve real problems. And it has mostly solved those problems."
isn't perfect? how brainwashed are you? it was created for usurers to leech and to enslave humanity.
(Score: 0) by Anonymous Coward on Wednesday January 31 2018, @08:14PM
It is possible for multiple truths to exist at once: Bank Failures [livinghistoryfarm.org]
Central banking did solve real problems, but usury is definitely a problem these days and central banking did make it easy for some institutions to control the market in their favor. Money is a fictional human construct, so it is up to us to figure out the best methods of using it for humanity's benefit.
(Score: 2) by Virindi on Thursday February 01 2018, @01:46AM
Except that you stated right there the real problem with that system: that banks were not held to the standard that every other business is. Writing checks that you know you cannot cover is fraud. Agreeing to provide more goods than you can provide is fraud. All that should have happened, was a law that states that every note must be 100% backed (and that to cover the cost of storage etc, notes may decrease by a predetermined amount over time or whatever, as long as it is explicitly stated).
Instead we got to keep the concept of giving out more notes than you can possibly cover, and the entire economy was built on it! That is insane. The only reason that happened is because bankers had sufficient political power to force this scam to continue to be legal. And over time, rather than stopping the root problem, a series of industry-protectionist rules built up around the practice.
Making more promises than you can fulfill is not capitalism, it is lying to people to steal from them. And now, everyone thinks that is the only way the world can operate.
(Score: 1, Insightful) by Anonymous Coward on Wednesday January 31 2018, @06:25PM
the governments of the world are the enemies of free humanity. just look at the counterfeit greenback (fed reserve note) in the US as one example. it's basically an IOU for the loan the government took out from the international banksters at the federal reserve on "your" behalf. they spend the money they borrowed with your labor on making themselves rich with war machines to steal from other countries and pork to steal from the poor and give to the rich. ignorant slaves have the audacity to act like this system is legitimate in some way. most "modern" countries probably have a similar financial system/slave money.
globally, i suspect the whole point of the IMF is to go into countries that have monetary systems where their governments still actually control the money directly for the people (for better or worse) and get control for the international banksters. i know they make loans they can't repay. probably to force them to hand over control. eventually they would link all these slave states together with one privacy-free digital currency. this is why we have to have cryptocurrencies with privacy baked in. to fight against these scum. this is a war! just because most people don't seem to know it's raging doesn't change that fact.
(Score: 2) by bob_super on Wednesday January 31 2018, @10:28PM
Do you know why people actually put their money in Swiss bank accounts?
World-War-proof unmatched stability and safety.
Crypto-stuff? Yeah, not so much.
(Score: 2) by jmorris on Thursday February 01 2018, @04:14AM
People using crypto fall into a few groups, easily identifiable:
1. People who think it is some sort of hard currency, "the next gold", types. These people are fucking morons who will lose everything. Evolution in action.
2. People who see it as a speculative bubble, dive in and buy as much as they can and "HODL" through the volatility and then buy the dips to get even more. Some borrow money to buy more crypto. Everybody thinks THEY will be the one to call the top and get out but by definition most will end up wrong and lose everything when the bubble bursts. These people are fucking morons. Evolution in action again.
3. People using it to launder money. Divide these into two sub-groups:
3a. Those using pure blockchain crypto like BTC which is a solid traceable public record. These people are fucking morons.
3b. Those using the newer less / untracable crypto. These people are criminals, but smart ones. They might win the game.
4. Miners. Except in situations where they can manage to steal the electricity to run their flaming hot GPUs and custom ASICs they will sometimes make a little return on their investment but few get super rich at it because so many people have piled into mining as "the next get rich quick scheme." Not quite fucking morons, not geniuses either.
5. People who have been locked out of the (((legit))) financial world. They can't get credit cards or merchant accounts, stripe, paypal, gofundme, etc. all banned them for crimethink. Being their only way to conduct any transaction where cash isn't viable, they must use it regardless of the hassle or additional costs involved. But as their number grows ever larger it legitimizes the whole scene, helping the people in group 3 hide their traffic.