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When this kind of tax evasion becomes widespread, that should be a clear indicator that the tax rate is too high.

In a cashless society, it becomes possible (if not inevitable) the enforcement of that taxation will become even more onerous.

$20 from grandma for your birthday? Gift tax.

You and your co-workers decide to split a large lunch? Temporary incorporation tax.

Your friend buys a 50 pack of DVD-Rs and you split them by reimbursing him half of the cost? Sales tax, again.

Sell an old comic book to a friend for more money than you paid for it? Capital gains tax.

Cash acts as an inhibitor to the impulse to tax everything or to tax it too greatly. It's understood that if you make a tax too burdensome, people will avoid and evade it.




> tax rate is too high

It's not that simple. Scandinavia has a higher tax rate than Italy (and Russia), but much less tax evasion.


"Too high" is not an objective measure.

If the people of Scandinavia feel that what they're getting in return is worth it, they'll pay the taxes.

People in Scandinavian countries have a higher amount of trust in their governments too. I'm sure that has a lot to with it.

Someone who believes that their tax money is going to be used for the legitimate(In his or her mind) needs of society has a greater incentive to pay them than the person who believes that their tax money is going to be used to pay kickbacks to the political allies of the people in charge.


Exactly this, trust. People give money to churches willingly when they trust the Church will use those funds to do good work. People pay taxes willingly when they see that they are being spent on things that help the community.

When that trust erodes, through government sinecures and throwing too much money at a brother-in-law's construction firm to build infrastructure, etc. Then people are unwilling to fund that activity and limit their tax payments as much as they can. And when they really lose faith as they did in Greece it seems, well not paying taxes seems to be more common than paying taxes and the whole thing breaks down.


That's wishful thinking. It's really matter of how the culture has evolved.


> In a cashless society, it becomes possible (if not inevitable) the enforcement of that taxation will become even more onerous.

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