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.
The saying is "A few bad apples spoil the barrel", meaning "be vigilant about bad apples and get rid of them ASAP." I'm baffled and frustrated by the tendency to use "a few bad apples" as if the saying were "a few bad apples are no big deal, get rid of them if you happen to notice."
I actually don't think reasoning from vague analogy and folk wisdom is all that great an idea, but reasoning from the reverse is probably worse.
Feel plenty free to make the case that we should tolerate some level of misconduct - I might agree. But please don't refer to those involved as "a few bad apples" while you do it.
Moved to a house with a few apple trees last spring and.. yeah. You have to pull those out quick or you'll be bringing the farmer next door wheelbarrowfulls of soft apples for animal feed :-(
You're overthinking my point. I don't care about the folk wisdom of bad apples.
I was just using it as a way of expressing the issue at the centre of aiming to have a zero tolerance society.
Not tolerating misconduct will always lead to ever increasing intrusion into our lives and people that choose not to take part where they can will automatically be viewed with suspicion for it because the ignorant assumption is only people with something to hide would do that.
I wasn't addressing your point. I was addressing your wording.
It's picking a nit - I acknowledged that in the very first sentence of my response.
Argue for what you want to argue for - I probably agree. Just don't use that phrase that way. Or do - just know that you will be annoying me (and apparently others - my comment got more upvotes than it deserved) and distracting at least some of your audience from your argument.
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.
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.
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.
In a democracy, we're not the ones who are making the decisions. The decisions are, by and large, out of our control. We decide who makes the decision, but the same decisions tend to get made on the majority of issues.
So is the problem that our decider selection process is flawed and puts up deciders who don't think deeply, or is it (more likely) that whoever you put into that position is likely to come up with the same answers, because they tend to answer important questions, and then to provide a different justification because it sells better?
> In a democracy, we're not the ones who are making the decisions.
In a representative democracy, as opposed to a direct democracy, yes. In much of the US, we have a bit of both, in practice.
But even in the case of representative democracy, as long as deciders are judged based on (proposed or actual) actions, our decisions about the deciders will be based on what we think about those actions. To whatever degree it's a problem that we don't think too deeply about things, it will be a problem in a representative democracy by virtue of deciders thinking deeply about what people generally will think more than what will actually give the outcomes people generally want (where those differ - which is at least "sometimes" by the nature of our premise).
It's fine to check the ticket before letting people in. However, movie theater employees can also interrupt people in the middle of the film to check their tickets. People pay money to see a movie and are interrupted because the theater staff can't determine who has or hasn't paid.
I think that's wrong on principle but they don't see anything wrong with it.
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.
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.
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.
"it's usually obvious who (person or business) controls the land anyway"
That's really not the case if the asset is owned by an opaque offshore company or trust - it's then pretty much impossible to know who the beneficial owner actually is.
You can make use of Adverse Possession to take ownership of land. The owner must reclaim their property, (and prove their ownership) or loose all rights to it. Unfortunately in UK squatting in a residential property is a crime, amusingly adverse possession still applies - you could claim someone's house but go to jail.
It's a weak threat though, most luxury apartment blocks used for 'investment' have security, you need to reside continuously for 10 years, they will send the owner a letter, etc.
I would like to see the principle of 'use it or lose-it' for limited public goods like land.
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
> 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.
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.
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.
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.
This question works both ways. If a radical change is being argued for, such as total financial surveillance without possibility of anonymous transactions, then I would expect the person making the argument to put forward a benchmark showing that total financial surveillance is making the world better.
In my case, "worked well" meant something like a mix of: a) the world did not end, and b) everyday life in developed societies (which previously did not have total financial surveillance, but are now eager to achieve it) was more or less the same then as it is today.
In fact, to expand on b), it seems to me (admittedly from a completely intuitive and unquantified perspective) that we are quickly losing civil liberties today and that this aspect was better in the past.
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?
I never implied taxing on trust alone, I'm simply arguing against total financial surveillance. Taxing in the mid-20th century did not rely on trust alone and it was a nice mix of trust and manual investigation in suspicious cases. I think such a mix is optimal for a predominant number of human activities and total surveillance should (almost?) never be reached for.
You can apply the same style of reasoning to end-to-end encryption. Various actors are aiming for total surveillance in that area too, it is most likely a terrible idea and we have precedent that the world works reasonably well without it.
I know, but based on context, I estimated that quip to be somewhat reactionary. The alternative is obviously not to leave out any kind of enforcement. The alternative is to go back to the kind of enforcement that was used and worked fine several decades ago.
Have we entirely eliminated tax evasion today? Money laundering continues. Our current approach of criminalising everyone and their dog isn't efficient.
> By "worked well" I mean people paid their taxes and the overwhelming majority were law abiding.
as i understand, the "overwhelming majority" (lower and middle class) are not the focus of the problem here as they rarely use tax havens to circumvent taxes anyway (it's probably not cost effective). this is all about those who have the funds and motives to circumvent taxation, who happen to be a minority - even thought they're not a minority when it comes to taxable income; the 1% or whatever.
as for the rest of your argument, i don't completely agree. while you're probably right in practice, i.e. the authorities would have used their tools against those movements, the goals of those movements were different. the civil rights movement was probably illegal at the time but the goal was to change the laws to make it legal. same for sex. no millionaire wants to make tax evasion legal, as that would affect all tax payers, even those of the lower and middle class. they want that only for themselves.
i agree that (hard) drugs are probably a comparable example - it's illegal and puts a strain on society. on the other hand, use of hard addicting drugs can be categorized as an illness. so should we label money hoarding and tax evasion an illness? offer treatment options? allow them supervised safe spaces to evade taxes so we can offer them help?
i'm not convinced that financial privacy whould be no exception. there must be limits if it affects the others. i also don't think environmental pollution should be an issue of privacy - you shouldn't be able to pollute the air and claim it's nobodys business, as your factory stands on your own private plot of land.
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.
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.
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
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
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/
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.
> 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.
It's one of those annoying internetisms that people often pick one part of a post or idea, take it out of context, and respond to that misrepresentation.
It's a bit like a straw man fallacy.
It happens a lot less often on HN though in my experience.
Right after the bit you quoted I noted that WB buying an expensive car doesn't even things out.
The idea of sales tax as a replacement for income tax isn't new or lacking rigor. Over the years it's had a lot of support from both economists and politicians. The math, at least on the surface, does work.
Personally, I haven't spent enough time looking at it to have a lot of conviction one way or the other about it's viability.
But it's an interesting idea that isn't invalidated by comparing cars.
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.
Different VAT categories exist though. Not every country uses them but it's a tool in the toolbox. On the other hand, taxes in a lot of European countries are regressive.
