Why we should fear a cashless world • Hacker News Board

Re: Why we should fear a cashless world

#201

Post by xixi77 » Mon, Mar 21, 2016, 7:51 PM UTC

nmrm2 wrote: post #20

fennecfoxen wrote: post #14

> We already live in a world that is, as far as the > distribution of wealth is concerned, about as unequal > as it gets. It may even be as unequal as it’s ever been. Sure, if by "a world" you mean "a hyper-prosperous nation like the US or the UK"... and if by "unequal as it's ever been" you mean that third-world countries are taking our jobs and becoming much more prosperous, hitting our middle income brackets - the…

> If you really mean globally, then inequality is in fact falling. No. Inequality is decreasing between nations as the developing world catches up with the west. But inequality within nations -- even developing nations -- is increasing. It's possible for inequality to increase as the the developing world catches up to the west; in fact, that's exactly what's happening. So the old geographical distributions are very s…

But, aren't "obscene levels of inequality" only obscene related to a few decades post WW2, which many people seem to take as a normal, but which is really rather unusual? The statement talks about "highest inequality ever", and I really don't see how any society can be much more unequal now than it was even 100 years ago -- not to mention any time before then...

Re: Why we should fear a cashless world

#202

Post by yason » Mon, Mar 21, 2016, 7:52 PM UTC

carlob wrote: post #53

Here in Italy the big issue is that many business will just not declare cash transactions. It's pretty common not to be given a receipt when buying a coffee and often when you visit a doctor they'll say: do you want the invoice or a discount? A couple of friends got married recently and I found out they paid over half of what the owed in cash to get pretty decent discount. So before we talk privacy and company let's…

Skipping taxes and using cash is only a problem if it's too widespread and the government really has genuine trouble collecting money even for the most basic needs of the society. Luckily, using cash to evade taxes is practically only possible for small entrepreneurs who can manage maintaining both the real income flow and the official income flow, and these people are also those who benefit from it the most.

It's the big businesses who practically need to log all sales and transactions by the book. Companies which have lots of employees and locations can't possibly maintain such double books in practice, not to mention keep it secret. (They can try smart "tax planning" via remote jurisdictions and tax havens though, which on the other hand isn't generally available for the local entrepreneurs.)

However, if you buy a lunch or pay your barber with cash, is it right that he gets your cash and the government gets nothing? Wrong. The minute the bistro owner or barber goes buy food from a chain store or fills up at the petrol station, VAT and other taxes will be paid and the money will re-enter the official circulation.

At best the money will bounce a few times between a few local entrepreneurs until it eventually becomes taxed again. How much effort is worth spending trying to chase these pennies?

What if efficient taxation reduces the amount of transactions? This happens all the time, and then both the tax man and the entrepreneurs lose.

What if all that unaccounted local cash flow actually lubricates the economy, making better and more efficient use of money, and thus generates larger total taxable flow of money?

The percentage of untaxed cash flow also serves as an indicator of how aligned people are with the government taxation level. If people are willing to make lengthy efforts to avoid taxes repeatedly, then maybe taxes are too high. If they only do it when it's convenient or for local shops, then maybe everything is close to fine.

It's not so black and white whether it's a "huge cost for society" as it's also "beneficial to society". The question is about trade-offs which need to be balanced, not overruled.

Re: Why we should fear a cashless world

#203

Post by prophet_ » Mon, Mar 21, 2016, 8:00 PM UTC

carlob wrote: post #53

Here in Italy the big issue is that many business will just not declare cash transactions. It's pretty common not to be given a receipt when buying a coffee and often when you visit a doctor they'll say: do you want the invoice or a discount? A couple of friends got married recently and I found out they paid over half of what the owed in cash to get pretty decent discount. So before we talk privacy and company let's…

I don't think we have to go that far south to see these things happening. Here in Amsterdam the other day went to pick up the car from the garage I was amazed when the guy told me that I had to fork out 700 EUR cash only.

In Brazil this practice is also pretty common.

The more untrustworthy/incompetent/reckless the government is handling taxpayers' money, the more often one sees this kind of behaviour.

Re: Why we should fear a cashless world

#204

Post by rsync » Mon, Mar 21, 2016, 8:01 PM UTC

true_religion wrote: post #158

nmrm2 wrote: post #139

Earlier quoted context omitted.

> So a few hundred feed, costing millions? Nonsense. 1. Your parent actually actively maintains a private road, and has probably done their research... 2. It costs them so much because they just have a single road, so they can't amortize the cost over an entire city or country of roadway. Public utilities tend toward monopoly for exactly this reason -- providing the utility to any small fraction of society is enormou…

Warm mixed asphalt roads should cost about $1M per mile. It's expensive, but it's not ludicrously expensive. If well done, in a warm environment, of low traffic, no truck levels, then you won't have to repave for upwards of a decade. Source: Maintenance a private road outside the USA. Labour is cheaper, however, everything else is more expensive so it balances out vs US numbers last time I checked.

(parent here)

Again, I was giving my own anecdotes about my own road, but then mid-comment switched to a hypothetical "stretch of road" that someone might drive by, being maintained, and in my mind I was thinking of a four-lane highway. It was unclear.

I will say, however, that with all due respect - things are more expensive here in California than they are in FL, so while 400 meters of four-lane @ the Florida rate posted above comes out to ~1.2 Million, it's probably a fair amount more in California.

It's expensive.

Re: Why we should fear a cashless world

#205

Post by xixi77 » Mon, Mar 21, 2016, 8:01 PM UTC

bryondowd wrote: post #196

xixi77 wrote: post #193

Many very good points there, and it's definitely nice to see this suggested from the left. Although: - "We already live in a world that is, as far as the distribution of wealth is concerned, about as unequal as it gets. It may even be as unequal as it’s ever been." -- I keep seeing this kind of statement all over. It seems really, really hard to believe, presuming that "ever" includes antique or even more recent feud…

6 billion out of a global population of 7.125 billion is just over 84%, so not that unbelievable, particularly considering how quickly a usable phone becomes worth approximately zero in the first world.

Yeah, but (e.g. looking at http://www.census.gov/idb/worldpopinfo.html in 2014) 6bn people means that literally everyone over age of 14 has a mobile phone (plus about 100 million of those under 14, too). Even accounting for all the phones first-world children have, it seems like quite a stretch.

Re: Why we should fear a cashless world

#206

Post by randyrand » Mon, Mar 21, 2016, 8:05 PM UTC

carlob wrote: post #53

Here in Italy the big issue is that many business will just not declare cash transactions. It's pretty common not to be given a receipt when buying a coffee and often when you visit a doctor they'll say: do you want the invoice or a discount? A couple of friends got married recently and I found out they paid over half of what the owed in cash to get pretty decent discount. So before we talk privacy and company let's…

> has a huge cost for society

Has a huge cost for the government, yes, but whether or not its a cost to society depends on the marginal benefit of the government having that dollar, vs the marginal benefit of keeping that dollar in public hands.

A corrupt government would be the extreme case of where that dollar is likely best kept from the tax man, but this is far from exclusive to corrupt governments.

Re: Why we should fear a cashless world

#207

Post by SilasX » Mon, Mar 21, 2016, 8:06 PM UTC

yason wrote: post #202

carlob wrote: post #53

Here in Italy the big issue is that many business will just not declare cash transactions. It's pretty common not to be given a receipt when buying a coffee and often when you visit a doctor they'll say: do you want the invoice or a discount? A couple of friends got married recently and I found out they paid over half of what the owed in cash to get pretty decent discount. So before we talk privacy and company let's…

Skipping taxes and using cash is only a problem if it's too widespread and the government really has genuine trouble collecting money even for the most basic needs of the society. Luckily, using cash to evade taxes is practically only possible for small entrepreneurs who can manage maintaining both the real income flow and the official income flow, and these people are also those who benefit from it the most. It's th…

The downside is not simply in the value of the missed taxes; it's the fact that the best business is now determined by tax evasion capability.

Instead of "the most dominant market players are the ones with the best products", we get "the most dominant market players are the ones who have some combined aptitude in product value and tax evasion". That is, some resources are wastefully diverted to tax evasion instead of to making better products.

A smart dude who could have been working towards self driving cars is instead finding ever-cleverer ways to hide money or game the tax code.

Re: Why we should fear a cashless world

#208

Post by dreamfactory2 » Mon, Mar 21, 2016, 8:07 PM UTC

LordKano wrote: post #172

carlob wrote: post #53

Here in Italy the big issue is that many business will just not declare cash transactions. It's pretty common not to be given a receipt when buying a coffee and often when you visit a doctor they'll say: do you want the invoice or a discount? A couple of friends got married recently and I found out they paid over half of what the owed in cash to get pretty decent discount. So before we talk privacy and company let's…

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 spli…

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

Automation

Re: Why we should fear a cashless world

#209

Post by Lawtonfogle » Mon, Mar 21, 2016, 8:12 PM UTC

studentrob wrote: post #129

tgb wrote: post #124

Earlier quoted context omitted.

Is this game-able by buying lots of things for a penny each from your own store, that kind of thing?

Somewhat but I imagine you'd risk getting caught =) One thing I wonder is if you have an increased likelihood of winning if you buy more. Does a $1 purchase give you the same chance to win $100 as a $20 purchase? I don't really know. Over 100 receipts you usually win like $5

Make the winnings be a multiplier of the tax paid on the receipt.

Re: Why we should fear a cashless world

#210

Post by nunyabuizness » Mon, Mar 21, 2016, 8:12 PM UTC

rsync wrote: post #116

clarkmoody wrote: post #94

Earlier quoted context omitted.

Ah, the tried-and-true roads & bridges argument. No, I don't believe the government is necessary to do those things. But if you look at actual government spending, these sorts of infrastructure projects are dwarfed by things like military spending, which could use a reduction.

"No, I don't believe the government is necessary to do those things." I live on a very long (two miles) private road that I jointly build and maintain with an association, etc. There is no government role whatsoever, and we even have bridges. So it would appear that my experience validates your libertarian fantasy world. Look - we're actually doing it! I've got sour news for you. Even a wealthy, well educated collect…

> It's very difficult and costly. We are right on the edge of success or failure in this maintenance. Further, if we were to actually pave the road (a true fantasy) it would be completely, totally unthinkable with regard to cost. Asphalt is paid for by the square foot and it isn't cheap. When you drive by a very quick section of asphalt road being resurfaced ... say 200-400 meters or something - very short ... understand that that is millions of dollars in asphalt work. Millions. Can you build some roads and bridges without the government ? Sure, of course you can. Will they approach, in any category, even the bare minimum acceptable standard that you hold ? No.

1) If it's expensive to do for the private sector, it's expensive to do for the government, no part of the cost equation changes.

2) It only seems "cheaper" b/c the private sector would have to ask for money by providing enough value enough for you to part with your money, while government doesn't, and raises money by pointing guns at people. However, to avoid the free-rider problem, you can use assurance contracts to raise the construction money and tolls to pay for maintenance, similar to what governments would do anyways.

3) American infrastructure was rated a D+ by the ASCE, so in what way is having government the sole provider of infrastructure a guarantee of quality?

4) slightly unrelated, but do you really think we'd have the same level of urban sprawl, needing a car to get anywhere in suburbia and such a heavy reliance on fossil fuels if roads were built through market forces rather than government subsidy?