At 09:26 27/05/01 -0500, you wrote:
(KH)
>>However, this accidental birth of a new currency is less likely than a
>>proactive decision to start one. This is much easier to imagine. For
>>example, if, say, Microsoft, General Electric (the finance division
>>thereof), VISA, IBM, Citibank, WalMart and one or two more of the biggies
>>decided to issue a new e-currency, fully backed by their assets, with
>>guaranteed exchange value against a defined package of goods, and able to
>>be securely transferred, then it's possible to imagine this becoming a
>>useful currency for individual use. The new currency would only then
>>require the formation of investment banks to pool individual savings, and
>>it would then become a fully-functioning currency. I cannot see how even
>>the US government could stop this.
(TL)
<<<<
Easy. Require payment of taxes in legal tender. Make all government
payments in legal tender. Require all banks to deal with the Fed in legal
tender as to reserve requirements, capitalization, etc.That's the way it
works now, and there's little reason to change it, from the government
viewpoint.
>>>>
Well, as you say, governments already do this. But if, because of digital
currency, transactions and incomes and business contracts become
increasingly invisible to governments, then the requirement of legal tender
only means that governmental taxation income will steadily reduce. As I
mentioned before, the complexity of a digital currency world will mean that
governments will be able to do nothing to prevent this.
(TL)
<<<
I once did the paperwork for a non-profit, tax-exempt organization. One of
the projects we had in mind was a LETS (Local Exchange Trading System). The
examiner at the IRS had a hissy fit over that one and just about didn't
give us our tax-exempt status. The IRS requires payment in legal tender,
not LETS dollars and they feel threatened by local currencies.
>>>
Yes, but LETS tokens, not being exchangeable against more than a very
restricted range of local services and goods (almost every other LETS
member round here were aromatherapists, for example) were not true currencies.
But, as already said, governments are not able to tax between about 15-40%
of total national economies anyway (that is, individuals and legitimate
businesses with two sets of accounts books -- the grey economy), nor a
considerable amount of criminal businesses such as illegal drugs (10-20% of
the total economy?), nor counterfeit money (5-10% of the economy?).
As I see it, governments will increasingly have to concentrate on the
taxation of property and visible goods -- as they did in the Middle Ages.
Keith
___________________________________________________________________
Keith Hudson, General Editor, Calus <http://www.calus.org>
6 Upper Camden Place, Bath BA1 5HX, England
Tel: +44 1225 312622; Fax: +44 1225 447727;
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