Comment by xenotux
3 days ago
> What's the point of surveilling the movements of average citizens' money?
The most important is taxation. People pay their babysitters or gardeners under the table, or transact with friends and family without reporting income, and this is a huge amount of lost tax revenue.
Another reason are policy options. For one, there are certain decidedly "non-terrorist" goods and services that the government might not want you to purchase. Heck, in the era of ZIRP, many economists were seriously talking about negative interest rates. You can't do that if a person has the option of taking out cash and hiding it under the mattress.
> People pay their babysitters or gardeners under the table, or transact with friends and family without reporting income, and this is a huge amount of lost tax revenue.
Is it though? The entire bottom 50% of the population paid something like 3% of total federal income tax, by intentional design of the tax system. Babysitters don't owe any significant amount of taxes whether they report it or not and under some circumstances (e.g. EITC) their effective rate can even be negative. Forcing them to report the income can't seriously be the justification for all of this mass surveillance.
> Heck, in the era of ZIRP, many economists were seriously talking about negative interest rates. You can't do that if a person has the option of taking out cash and hiding it under the mattress.
That doesn't have anything to do with physical cash. You could do the same thing by borrowing at a negative rate and investing the money in any security/asset/commodity. Which is why negative interest rates are crazy and never really happened.
> People pay their babysitters or gardeners under the table, or transact with friends and family without reporting income, and this is a huge amount of lost tax revenue.
This money was already taxed when the individual who pays the babysitter received it. It's questionable whether the society as a whole benefits from taxing babysitters.
> Heck, in the era of ZIRP, many economists were seriously talking about negative interest rates. You can't do that if a person has the option of taking out cash and hiding it under the mattress.
I'm not sure you'll gain much support for bespoke policies like that. Just reading this passage made me feel an urge to hide some cash under the mattress.
>This money was already taxed when the individual who pays the babysitter received it. It's questionable whether the society as a whole benefits from taxing babysitters.
Replace babysitter with any government regulated and licensed profession and the motives become clearer. The government gets power by forcing things above the table because once above the table you can be forced to transact with who they want and how they want and those parties then become dependent upon government to a degree.
There's no such thing as cash under the table land surveying, for example.
> This money was already taxed when the individual who pays the babysitter received it.
And the money the retail clerk gets paid was already taxed when the customers spent it at the store. No, wait, it was already taxed when they got paid it! No, wait, it was already taxed when the customers of their employers spent it! No, wait——
...This whole idea of "money getting taxed multiple times" being a bad thing is absurd. Of course any given dollar going through the economy is going to get taxed many times. It's not about the dollars; it's about the transactions. And, ultimately, it's about funding the government so it can actually provide services, from sanitation all the way up to the military.
(Note that this is not an attempt to say that "the more taxation, the better"; that's obviously absurd, too. There are different levels of taxation that make sense for different people, different countries, different transactions, and different economic circumstances. There is no one simple magic rule you can follow that will always make things better when it comes to taxation, any more than there is with anything else economic or political.)
You get less of what you disincentivize. Putting artificial friction on every single transaction is not free, and it's fucking obnoxious.
Meanwhile, the government you fund takes that money and uses it to surveil you, and commits crimes across the world in your name. And this giant machine that's supposed to stop the bad guys tells you there's nothing to see here when some big scandal comes up right in front of your face.
Yes, I think money being taxed multiple times is too much.
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> And the money the retail clerk gets paid was already taxed when the customers spent it at the store.
Your imaginary analogy chain breaks here. The store is taxed on what's left after the expenses, individuals are taxed on the total income.
If I, as an individual, could deduct my babysitter expenses from my income taxes, I would have no questions as to why babysitter has to pay them. This doesn't happen however. In some countries you can deduct 50% at best.
Therefore I don't see the point of taxing first the parent and then the babysitter again. You can as well tax the parent 2x, it would be the same from the economical standpoint.
> There are different levels of taxation that make sense for different people, different countries, different transactions, and different economic circumstances
You didn't make any effort to explain why taxing babysitters is the "level that makes sense" as you put it. You just write some generic words how taxes are good in general and help government to provide services. It's irrelevant to our conversation.
Yes lets tax these small transactions so that we can go back and give the tax cuts to the billionaire class.
I think that capitalism has strayed away from its original goal. We have basically parasites in the current ecosystem leeching off of either land rent or being billionaires imo.
But no it feels like we don't discuss it, we will all be ever so radicalized about something that happened on twitter etc. that we are forgetting the issue of classes.
Once again, Georgism/land value tax is the superior tax policy. Simpler enforcement.
Man I wanted to write about georgism (see my comment on the parent's post where I talk about land parasites)
I am such a big georgist. Seriously, I might genuinely cry seeing how georgism isn't being implemented. it is one of the most superior policy systems but the parasites own so much that we don't even discuss about it
I was talking to my friend about georgism when he asked me if I was a capitalist/communist.. Basically in the end he just said, that he doesn't know about economics... so he doesn't know and they wanted to change the topic I feel like this might be a major hurdle where people think that economics is some huge mumbo jumbo when I feel like georgism and (index funds?) are two things that almost everyone should know given how simple they are.
Georgism is land communism. The 'community' or whoever is collecting the taxes (LVT) owns all land and rents it out. Ideal LVT puts the market value of all land at $0 after tax liabilities, so even if you could 'own' land under Georgism it would largely be economically meaningless.
It's straight up marxism hidden as a capitalist market measure. Vacant land portion of property taxes are essentially georgism-light where the land capital is mostly under a capitalist model but with a % owned by the community (or more likely, a government that commonly works against community interests) and rented out in the form of property tax (in georgism the % is 100).
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Tariffs also make sense, since all that stuff is going through and declared to customs anyway, although it might be an economically inferior mechanism.
Either way the income tax is one of the most dystopian ways to collect tax as it pretty much relies on mass surveillance of domestic activities to be implemented fairly or effectively.
Neoclassical economics recognizes, under the standard macro model, that labor taxation is second best. The first-best is capital taxation, once and for all time, but due to time inconsistency (nothing prevents a government from taxing again in the future) it fails to be useful outside of theory. There is some squishiness once you consider overlapping generations model, arguably more realistic than infinitely lived agents (which I always felt represent companies or familial dynasties more than real people).
Land value taxation is different because there is no meaningful growth or loss of the capital stock.
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