Re: US law - World Law - Secret Banking

On the issue of "money leaving the country illegally" (the general notion
that people taking money out of the country in suitcases or in charged-up
smartcards are doing something Evil and Unclean).

Just as we (and Phil Zimmermann, who widely made this point) were able to
convince a lot of people about strong crypto by talking about "sealed
letters" vs. "postcards," so, too, do we need to make the same points about
"untraceable cash flows" and even about "taking money out of the country."

I imagine this conversation with my father:

Dad: "But if the government needs to trace the spending of illegal money,
then these anonymous transfers you've been telling me about need to be
outlawed."

Me: "Can the government track that $100 you spent last week? Should it?"

Dad: "Well, no, that's my money and it's none of the government's damned
business what I spend it on."

Me: "So, we agree."

Dad: "Well, but the drug dealers have to be tracked."

Me: "First, the drug dealers are likely dealing in such mega-quantities
that they'll simply find compliant banks and other ways to hide the
transfers. It's unlikely that any of the proposed tracking schemes will be
effective. Second, how can the government possibly know which funds are
drug-related and which are not? Their scheme involves sacrificing
fundamental liberties for the dubious possibility that _some_ drug dealers
will be caught. Random raids on  houses would probably work better, but of
course would be just as unconstitutional."

Dad: "But then what do we do about the drug dealers?"

Me: "You and me don't do drugs. So what's the problem?"

Dad: "But..."

Me: "Name a drug that kills more people per year than alcohol. Or nicotine."

Dad: "Well...."

[My father, at age 72, has come around to the "legalize all drugs"
position, a view also supported by noted thinkers and former politicians,
including former Secretary of State George Schulz (or Shultz, or some
variant).]

I 'm convinced that a similar argument applies to those transferring funds.
Many funds transfers are not even tax evasion; I am one of many people who
are researching ways to expatriate some or all of my funds to jurisdictions
friendlier than the U.S. So long as I fill out the proper boxes on my 1040,
and pay appropriate taxes, I am committing no crime by moving my wealth to
some other country.

Those on the list about a year or so ago may recall that there are
proposals to in fact impose a "capital flight tax." This would make the
U.S. a country very much like the former Soviet Union, which forbade such
transfers of wealth without payment of heavy taxes.

The recent FinCEN-friendly conference in San Francisco raised the alarm
about digital cash and smartcards being used to make money transfers
easier. Horrors!

--Tim May

Boycott "Big Brother Inside" software!
We got computers, we're tapping phone lines, we know that that ain't allowed.
---------:---------:---------:---------:---------:---------:---------:----
Timothy C. May              | Crypto Anarchy: encryption, digital money,
tcmay@got.net  408-728-0152 | anonymous networks, digital pseudonyms, zero
W.A.S.T.E.: Corralitos, CA  | knowledge, reputations, information markets,
Licensed Ontologist         | black markets, collapse of governments.
"National borders aren't even speed bumps on the information superhighway."

Excerpts from internet.cypherpunks: 25-Apr-96 Re: US law - World Law -
Se.. by Timothy C. May@got.net 
> I 'm convinced that a similar argument applies to those transferring funds.
> Many funds transfers are not even tax evasion; I am one of many people who
> are researching ways to expatriate some or all of my funds to jurisdictions
> friendlier than the U.S. So long as I fill out the proper boxes on my 1040,
> and pay appropriate taxes, I am committing no crime by moving my wealth to
> some other country.
> 
> Those on the list about a year or so ago may recall that there are
> proposals to in fact impose a "capital flight tax." This would make the
> U.S. a country very much like the former Soviet Union, which forbade such
> transfers of wealth without payment of heavy taxes.

    I have been reading this list to get an idea where Declan gets some
of his lunatic ideas and what Rich Graves says when he is not up to
Holocaust fetishism.  Despite Timothy's claim to the contrary, it seems
that the basic point of this list is some libertarian notion that tax
evasion is a good thing.  While I am not clear how serious of threat, if
one at all, to a system of fair taxiation, since much of the talk could
be simply bluff, I have been made glad for the first time for the War on
Drugs.  This silly war--tragic in terms of its economic cost and its
assault on liberty--at least has forces some government agencies to take
you seriously enough to figure out how to derail your plans of tax
evasion.

Michael Loomis

> one at all, to a system of fair taxiation, since much of the talk could

	fair taxation. What a concept. Now why did this person appear
in my "cypherpunks-people-to-read-file?" I should go figure this out
and fix it.

> be simply bluff, I have been made glad for the first time for the War on
> Drugs.  This silly war--tragic in terms of its economic cost and its
> assault on liberty--at least has forces some government agencies to take
> you seriously enough to figure out how to derail your plans of tax
> evasion.
> 
> Michael Loomis
> 


-- 
Sameer Parekh					Voice:   510-601-9777x3
Community ConneXion, Inc.			FAX:     510-601-9734
The Internet Privacy Provider			Dialin:  510-658-6376
http://www.c2.net/ (or login as "guest")		sameer@c2.net

On Fri, 26 Apr 1996 sameer@c2.org wrote:

> > one at all, to a system of fair taxiation, since much of the talk could
> 
>         fair taxation. What a concept. Now why did this person appear
> in my "cypherpunks-people-to-read-file?" I should go figure this out
> and fix it.

That's not what he wrote. He meant fair TAXIation. Michael is criticizing
arbitrary government regulations on transportation systems. See part four
of Hernando de Soto's _The Other Path_ and other publications from
Instituto Libertad y Democracia (Lima, Peru). The original Spanish version
is more complete, with a statistical appendix, but the US paperback
edition, ISBN 0-06-091640-0, hits all the main points.

The issue of taxis that lack government license has also been raised in
New York City and San Franciso in recent years. Might also be in Gabriel
Zaid's La Economia presidencial, but it's been a while since I read that,
and I don't own a copy.

Cypherpunk relevance? In theory at least, the "medallions" that identify
legal taxis are a form of Chaum's credentials without identity.

Loomis is in your "cypherpunks-people-to-read-file" because of the
ZundeLooMirror. He's a good guy, if a bit abrasive. Unfortunately, I found
out too late that the best way to get him to do something stupid and
wrong is to tell him that it's stupid and wrong. That makes you an enemy,
and not worth listening to.
http://www.c2.org/~rich/Not_By_Me_Not_My_Views/rebuttal.html

By the way, I think I know what you mean, but someone unfamiliar with
cypherpunks or you might read this indication that you have a "people to
read" file, and don't care to read people you disagree with, the wrong
way. You're liable to be called a FUCKING CLOSED-MINDED CENSOR NAZI.

-rich

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On Fri, 26 Apr 1996, Michael Loomis wrote:

>     I have been reading this list to get an idea where Declan gets some
> of his lunatic ideas and what Rich Graves says when he is not up to
> Holocaust fetishism.  Despite Timothy's claim to the contrary, it seems
> that the basic point of this list is some libertarian notion that tax
> evasion is a good thing.

That might be one view, but not mine. I think people who evade income
taxes are bad -- they're stealing from the rest of society. But I believe
that the growth of cryptoanarchy means that people who make far more money
than we do can evade taxes with ever greater ease. The current system puts
honest people at a disadvantage, which is never a good thing. The
technical and economic analyses presented here are neither good or bad --
they're true or false. I tend to believe that they are more true than
false. 

My semi-conclusion is that in a knowledge and services society like ours,
a fair share of income tax cannot be collected from the very rich without
imposing totalitarian controls; therefore, government needs to be more
entrepreneurial, cut costs, divide labor, and raise revenue through
somewhate harder-to-evade sales, real estate, and inheritance taxes. Such
a system would probably be more regressive in theory, but not too
different in practice -- and it would be honest. 

Globalization and network-based freedom further weaken the sovereign,
geographically defined, vertically integrated nation-state. I don't
necessarily see this as a bad thing. I agree with the crypto-anarchist
analysis that the status quo is untenable, but I haven't made up my mind
where we should go.

My academic background is in Latin America. I've known a lot of
governments that really suck, and a lot of revolutions that are even
worse.

> While I am not clear how serious of threat, if
> one at all, to a system of fair taxiation, since much of the talk could
> be simply bluff, I have been made glad for the first time for the War on
> Drugs.  This silly war--tragic in terms of its economic cost and its
> assault on liberty--at least has forces some government agencies to take
> you seriously enough to figure out how to derail your plans of tax
> evasion.

In what way has the War on Drugs derailed tax evasion? Please elaborate. 
On the contrary, I think it has demonstrated the ineffectiveness of
attempts to control tax evasion and smuggling. 

Thank you for providing this rare insight into how you think. I haven't
heard from you in three months; I was starting to wonder. Please drop by
and have a beer some time.

- -rich
 FUCKING STATIST and HOLOCAUST FETISHIST
 http://www.c2.org/~rich/Not_By_Me_Not_My_Views/rebuttal.html

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On Fri, 26 Apr 1996, Michael Loomis wrote:

>     I have been reading this list to get an idea where Declan gets some
> of his lunatic ideas and what Rich Graves says when he is not up to
> Holocaust fetishism.  Despite Timothy's claim to the contrary, it seems
> that the basic point of this list is some libertarian notion that tax
> evasion is a good thing.  While I am not clear how serious of threat, if

If Tim is claiming anything to the contrary it is the importance of defending
tax evasion on this list. There isn't any. Its acceptance is a foregone 
conclusion around here. The place for debating the ethics of such 
things is on usenet political groups. The focus here is using crypto to build
the institutions to escape the constraints of physical commerce and 
monitoring. Obviously, for the practical purposes of most people we 
aren't there yet. It's quite promising, though. It's not the "why" but 
the "how". 

It might be useful for you to browse the early portions of the archives 
when they come back or read Tim's and Eric's original manifestos
(somewhere in the bowels of ftp.csua.berkeley.edu/pub/cypherpunks/rants)
and Black Unicorn's essay on his love of cash from Detweiler's page
(can't remeber the url, I'll dig it up if you're interested, it's got
some nice outtakes from past discussions, though Det himself is 
rather out of it). The cyphernomicon is also instructive (it'll show up 
on search engines). There are tons of other good sources, too. 

Ps. I know there are other list archives, but none of the urls I dig up 
seem to work. Help!

On Fri, 26 Apr 1996 s1113645@tesla.cc.uottawa.ca wrote:

> 
> On Fri, 26 Apr 1996, Michael Loomis wrote:
> 
> > Holocaust fetishism.  Despite Timothy's claim to the contrary, it seems
> > that the basic point of this list is some libertarian notion that tax
> > evasion is a good thing.  While I am not clear how serious of threat, if

> It might be useful for you to browse the early portions of the archives 
> when they come back or read Tim's and Eric's original manifestos
> (somewhere in the bowels of ftp.csua.berkeley.edu/pub/cypherpunks/rants)
> and Black Unicorn's essay on his love of cash from Detweiler's page
> (can't remeber the url, I'll dig it up if you're interested, it's got
> some nice outtakes from past discussions, though Det himself is 
> rather out of it).

LD put my work on his page?  How cute.

I'll repost the work here if there is enough interest.  No telling what LD
might have done to the original.

---
My preferred and soon to be permanent e-mail address:unicorn@schloss.li
"In fact, had Bancroft not existed,       potestas scientiae in usu est
Franklin might have had to invent him."    in nihilum nil posse reverti
00B9289C28DC0E55  E16D5378B81E1C96 - Finger for Current Key Information
Opp. Counsel: For all your expert testimony needs: jimbell@pacifier.com

On Fri, 26 Apr 1996, Michael Loomis wrote:

> Excerpts from internet.cypherpunks: 25-Apr-96 Re: US law - World Law -
> Se.. by Timothy C. May@got.net 

> > Those on the list about a year or so ago may recall that there are
> > proposals to in fact impose a "capital flight tax." This would make the
> > U.S. a country very much like the former Soviet Union, which forbade such
> > transfers of wealth without payment of heavy taxes.
> 
>     I have been reading this list to get an idea where Declan gets some
> of his lunatic ideas and what Rich Graves says when he is not up to
> Holocaust fetishism.  Despite Timothy's claim to the contrary, it seems
> that the basic point of this list is some libertarian notion that tax
> evasion is a good thing.

Your observation about the primary point of the list is incorrect in my
view and even if it were correct, you overlook several aspects of the U.S.
taxation system when you class all efforts to reduce or otherwise mitigate
taxation as "tax evasion."

First of all, and as one of the only western powers to do so, the United
States taxes its citizens on _worldwide income_.  While this in itself,
with a proper foreign tax credit system, is not offensive, when the Unites
States adds to this a very wide scope of extraterratorial jurisdiction and
compelled process, it becomes more than tax.  Further, the United States
implements policy it cannot directly legislate constiutionally through
taxation.

Now, all of the above might not be unusual, but when it is combined with
proposals like the expatraition tax (leave the country and pay a tax for
doing so- and by the way, there is a form of this on the books and
applicable today in the US) and strict money laundering regulations you
approach something like currency controls.

It is also worth noting that your notion of tax evasion is by no means
universal.  Switzerland, Liechtenstein, the Cayman Islands, France, the
United Kingdom, all define tax evasion differently.  Who are you, or
anyone else, to say what tax evasion is, especially when it regards income
derrived outside of the geographical and economic boundries of the taxing
state?

The United States has asked for this problem by imposing a regime of
worldwide taxation on income.  I, for one, am not particularly
sympathetic.

> While I am not clear how serious of threat, if
> one at all, to a system of fair taxiation, since much of the talk could
> be simply bluff, I have been made glad for the first time for the War on
> Drugs.  This silly war--tragic in terms of its economic cost and its
> assault on liberty--at least has forces some government agencies to take
> you seriously enough to figure out how to derail your plans of tax
> evasion.

Unfortunately, and if you stick with the list long enough and absorb the
ramifications of some of the technology, I think the government has a
losing battle.  At the moment it is estimated that 10% of tax evaders in
the United States are ever caught.

It is partly the arrogance of many U.S. citizens, and the view that their
government knows the one single way to conduct economic and foreign
affairs, that empowers the United States to impose her tax and
economic policy on unconnected sovereigns thousands of miles away.

I think you have a rather narrow view of the list in any event.
Cypherpunks are about much more than the ramifications of new technologies
on the tax systems of the world.  But, if it's sexy to demonize the list
by calling us all tax evaders, feel free.

> Michael Loomis

---
My preferred and soon to be permanent e-mail address:unicorn@schloss.li
"In fact, had Bancroft not existed,       potestas scientiae in usu est
Franklin might have had to invent him."    in nihilum nil posse reverti
00B9289C28DC0E55  E16D5378B81E1C96 - Finger for Current Key Information
Opp. Counsel: For all your expert testimony needs: jimbell@pacifier.com