Re: ECON: Eliezer's calls

From: Michael S. Lorrey (mike@datamann.com)
Date: Tue Mar 07 2000 - 09:07:29 MST


Billy Brown wrote:

> Michael S. Lorrey wrote:
>
> > People don't realize that at least
> > half of the power that the IRS has over you is simply due to the fact that
> > people have been trained to BELEIVE that the IRS has power over
> > them, kind of like Freddy Kruger.
> <snip>
> > Refusing to incriminate yourself via your 5th amendment rights is your
> sheild
> > against their opressive confiscation.
>
> Like I said before, I'm sure barter could be an effective technique for
> getting away with tax evasion. My point, however, was that simply using
> barter instead of cash changes nothing at all about the legality of failing
> to report any given transaction. If you want to give it a try that's
> certainly your call, but less intrepid souls should be aware of the fact
> that simply avoiding money doesn't exempt them from prosecution.
>

I suggest you look over this page and its linked pages before you make such a
conclusion.
http://www.ex.ac.uk/~RDavies/arian/barter.html

The whole problem with taxing barter exchanges is the presumption that the
government has a right to part of your property, which is clearly
unconstitutional. The government has a right to tax transactions involving money
because the money is a security instrument of the government. The traditional
right of government to tax interstate trade is threefold: a) because money from
different financial institutions or governments was involved, and b) because
trade flowed through the publicly owned waterways which were maintained by the
Coast Guard and the Corps fo Engineers, and c) the government typically provided
police protection on the roads and in the markets.

An internet based barter system would evade all of these bases:
a) the internet (at least in the US) is completely private, the government owns
none of it.
b) the barter marketplace is a privately maintained entity that provides for its
own security and indemnification through encryption and insurance
c) barter transactions will not use the fiat money issued by the federal reserve
or securities offered by the Treasury
d) any real goods would be transported via private shipping companies.
c) because no government issued money is involved, there is no rational basis to
evaluate the value of a given exchange, and it is illegal for the government to
arrive at its own arbitrary evaluations without a factual basis for the
valuation. Given the obvious variability in the value of the items or services
exchanged it is impossible to calculate a rational amount of capital gains or
profit, and exchanges without profit (i.e. both parties received 'fair value' in
what they regarded as an even trade) cannot be taxed in any event.

There is a distinct difference between a 'trade' and a 'sale'. A 'sale' implies
the use of money as a media of exchange, and a government has a right to tax
such transactions. A government also has the right to tax any profit made on
such transactions. However if you have an apple, and I have an apple, and we
each like each other's apple more than the one we have, and we trade evenly,
then there is no profit, and no exchange of money, and no sale.

Given these criteria, there is no legal basis for a government to claim a right
of taxation over modern barter transactions

--
TANSTAAFL!!!
Michael S. Lorrey
Director, Grafton County Fish & Game Assoc.
http://www.lorrey.com/gcfga/
Member, Extropy Institute
http://www.extropy.org
Member, National Rifle Association
http://www.nra.org
"Live Free or Die, Death is not the Worst of Evils."
                  - General John Stark


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