California Looking To Make All Bitcoin Businesses Illegal

An anonymous reader writes A new law has been proposed in California that would effectively outlaw all Bitcoin-related businesses that don't first get "permission." The details are vague within the bill itself, which is part of what makes it dangerous. If you're doing anything with virtual currency, you may have to go line up in Sacramento to get permission first.

Comments

Is it sad that it is old hat

[Anonymous Coward]

To do something like this and then either never issue said permissions or arrange it in such a way that getting said permission purposefully violates some other law that they can then hit you with.

Re:Is it sad that it is old hat

[ShaunC]

Yes, it's sadly common. Ask anyone who owns a strip club or an adult bookstore or a pawn shop, or even a bar in some places. The government doesn't usually make them illegal outright*; instead, they make them regulated. Then they draft regulations stating that those businesses can only operate in a certain zone of town. Oh, and you need a license, but it's going to run you half a million dollars, and they'll only grant one license every 10 years, or one license per 250,000 citizens (in a town of 30,000), or some other hurdle that's insurmountable enough so as to make your business effectively illegal.

Your second point reminds me of the marijuana tax stamps that are still law in 20 or so states. You incriminate yourself just by asking to buy the stamp in the first place.

*Because then the mayor couldn't accept an enormous campaign contribution in exchange for issuing a special license now and then.

Re:Is it sad that it is old hat

[MobSwatter]

Are they going to tell Saudi to get permission from Sacramento before they announce they are going to an alternate currency because the dipshits over here keep printing money raising the debt ceiling? Doubt that will happen, but the Saudi's might just give us a nice golf clap.

Re:Is it sad that it is old hat

[Anonymous Coward]

And then apologists will step up and declare that something is wrong with the business model as if not being able to cope with ridiculous rules is someone else's fault.

It can't be the government.

A fundamental problem with democracy is that the government's foolishness is the people's foolishness, and the people never want to appear foolish.

Re:Is it sad that it is old hat

[vux984]

In many of THOSE cases its government functioning as it should -- representing the will of the people in the community.

Lots of communities CITIZENS don't want strip clubs or pawn shops or porn shops or Walmarts or whatever; but they aren't illegal and the community can't outlaw them outright.. so the local government's mazes of red-tape to make opening such a business in the community difficult are simply a reflection of what the community wants implemented with the tools they have available to them.

Not always, of course, but often.

On the one hand its annoying if you want to open such a business; on the other hand... why exactly shouldn't a community be able to decide what businesses it does and doesn't want within its borders? It raises all kinds of genuinely interesting questions about the role of local government.

Re:Is it sad that it is old hat

[Anonymous Coward]

Derp, herp, move to Somalia if you don't like it here, etc., etc.

Re:Is it sad that it is old hat

[The Rizz]

Lots of communities CITIZENS don't want strip clubs or pawn shops or porn shops or Walmarts or whatever; but they aren't illegal and the community can't outlaw them outright.. so the local government's mazes of red-tape to make opening such a business in the community difficult are simply a reflection of what the community wants implemented with the tools they have available to them.

This is pure and complete bullshit. If the community's citizens didn't want such a business there, the business would get no customers and close down naturally. What actually is happening is that a cabal of Bible-thumping prudes who wish to impose their sense of morality upon others forces these laws through in order to control the larger population.

Re:Is it sad that it is old hat

[Cyberax]

Can I open a bar and a trash dump near your house?

Re:Is it sad that it is old hat

[Firethorn]

Your second point reminds me of the marijuana tax stamps that are still law in 20 or so states. You incriminate yourself just by asking to buy the stamp in the first place.

Supreme court tossed this out. Besides, near as anybody can tell, all the tax stamps sold have been to stamp collectors and people looking for curiosity items. So not much good.

Re:Is it sad that it is old hat

[Anonymous Coward]

You only need about 1000 customers to run a successful bar. That's a tiny fraction of the population of most cities.

Re:Is it sad that it is old hat

[Anonymous Coward]

All laws are forcing someone's view of morality on others. The only question is which is in charge at any given time. People can and will argue that certain moralities are better than others, and we do have broad agreement on a few points like not killing others, but the facts remain the same.

Re:Is it sad that it is old hat

[The Rizz]

I'm not arguing that. I was pointing out that the GP's point that the citizens didn't want these things is wrong - it's some citizens who do not want it.

Re:Is it sad that it is old hat

[Anonymous Coward]

we do have broad agreement on a few points like not killing others

Except before they are born, or when they commit certain acts (that some people call crimes), or when they are terminally ill, or when they have the wrong skin colour or those that might pledge allegiance to another faction... Why do you bother making artificial exceptions about killing? Ahh, it's because you want to attempt to impress *your* morality on others, right?

Re:Is it sad that it is old hat

[The Rizz]

You only need about 1000 customers to run a successful bar. That's a tiny fraction of the population of most cities.

Yes, but quite often the number who don't want the bar is even less. A very vocal minority rails against what they find immoral while dismissing claims that people want it - because if they want it, those people are dirty immoral deviants and should be ignored, anyway, right? This is the tyranny of the minority, and it happens constantly in politics.

Re:Is it sad that it is old hat

[drinkypoo]

In many of THOSE cases its government functioning as it should -- representing the will of the people in the community.

No, commerce represents the will of the people in the community. If you put up a strip club and nobody shows up and it goes out of business, that is the will of the community. If you want to put up a strip club and the government says no, that may or may not be the will of the community. I live in a town where government generally does the opposite of the will of the community. They imported a shitload of derelicts some decades ago (literally deliberately moving criminals and wingnuts into Clear Lake, CA) and now the political scene is completely boned here... and it's meth central, per capita anyway. The only thing that's improved that situation in a long, long time is MMJ, which has brought some greener money into the county.

Re:Is it sad that it is old hat

[Anonymous Coward]

There's a difference between:
"The community - the people in your street"
and
"The community - the people in your town"

A lot of people don't want those shops too near them...

Re:Is it sad that it is old hat

[Anonymous Coward]

I would suggest Europe instead, but yes, it's a good idea to move somewhere else and give business in the US "the finger".

Re:Is it sad that it is old hat

[Richard_at_work]

Yeah, that works for crack houses and drug dens, doesn't it?

Re: Is it sad that it is old hat

[Anonymous Coward]

And this is just as it must be. What would you prefer, the tyranny of the majority, HAH! You peons could never fathom what you should even THINK without an elite telling you. You need control and order. The Ruling Elite provides you with it. Be grateful.

Re:Is it sad that it is old hat

[Anonymous Coward]

It does, actually. The presence of those proves the community's citizens includes crack addicts. Of all people, they tend to be the least mobile, due to their need to be near a dealer, inside the crack house.

Re: Is it sad that it is old hat

[Anonymous Coward]

this entire article is bs and not worthy of print. with the author step forward with his real name. btw it is illegal to drive a car in california..... unless you get a license first. slashdot should apply the tiniest amount of integrity.

Re:Is it sad that it is old hat

[vux984]

No, commerce represents the will of the people in the community. If you put up a strip club and nobody shows up and it goes out of business, that is the will of the community.

If 95% of the people don't want it in the community, the remaining 5% that patronize it can still keep it thriving; especially if its bringing traffic from outside the neighborhood its actually in as well.

Commercial viability vs the will of the community are not necessarily in alignment either.

If you want to put up a strip club and the government says no, that may or may not be the will of the community

Of course.

Re:Is it sad that it is old hat

[Anonymous Coward]

To do something like this and then either never issue said permissions or arrange it in such a way that getting said permission purposefully violates some other law that they can then hit you with.

"Did you really think that we want those laws to be observed?" said Dr. Ferris. "We want them broken. You'd better get it straight that it's not a bunch of boy scouts you're up against-then you'll know that this is not the age for beautiful gestures. We're after power and we mean it. You fellows were pikers, but we know the real trick, and you'd better get wise to it. There's no way to rule innocent men. The only power any government has is the power to crack down on criminals. Well, when there aren't enough criminals, one makes them. One declares so many things to be a crime that it becomes impossible for men to live without breaking laws. Who wants a nation of law-abiding citizens? What's there in that for anyone? But just pass the kind of laws that can neither be observed nor enforced nor objectively interpreted - and you create a nation of law-breakers - and then you cash in on guilt. Now that's the system, Mr. Rearden, that's the game, and once you understand it, you'll be much easier to deal with."

Rand was batshit insane, but damned if she didn't have a point every now and then.

Re:Is it sad that it is old hat

[david_thornley]

And, if most of the people in the town were bible-thumping prudes, the laws will reflect the majority view and be in perfect accord with democracy.

Re:Is it sad that it is old hat

[deadweight]

No it does not. If you put a junkyard, an oil refinery, a strip club, a disco, and a power plant in my neighborhood they would all have customers from SOMEPLACE, but all would be completely hated by the people that live here. Zoning laws exist for a reason.

Re:Is it sad that it is old hat

[Anonymous Coward]

Yeah, and in my town it's ice cream trucks that are essentially outlawed... to operate one, in addition to the usual permits and health department inspections and certifications, you also need a daily sales permit that costs something like $300...

Musta been some town council person who either got run over by an ice cream truck, or was the butt of Eddie Murphy's teasing... https://www.youtube.com/watch?v=fIDR106lsK4

Re:Is it sad that it is old hat

[QuestorTapes]

> If the community's citizens didn't want such a business there, the business would get no customers and close down naturally.

Not necessarily. It always possible that the customers come over from other towns.

No actually disagreeing with you; just disagreeing on this particular bit of reasoning.

The peoples republic of...

[Anonymous Coward]

"Papers Comrade!"

Enjoy. You made it that way.

Re:The peoples republic of...

[Anonymous Coward]

Comrade, the People's Unity Party does not approve of unauthorized persons trading unauthorized goods and services, like odb-II readers and bitcoin!

Re:The peoples republic of...

[Anonymous Coward]

Who is hating on OBD-2?

Re:The peoples republic of...

[Anonymous Coward]

I hope the FCC doesn't get any ideas about internet licensing/permissions. Would love to see some FCC limitations written down somewhere, maybe a law.

Re:The peoples republic of...

[x0ra]

cf. http://www.8thcivic.com/forums...

Re:The peoples republic of...

[Anonymous Coward]

Story where last October the DNC members of the FCC ruled that videos critical of Obama should be regulated by the FEC and they should be banned since they did not diclose their funding to the FEC. Vote split on a 3-3 vote, same 3 who voted for this were also voting for "Net Neutrality".

I assume this will go the same as "Fairness Doctrine" did a few decades ago. Regulation of free speech according to "regulations" of the party in power.

Many are suspecting that sites that post political things will need to register with the FEC or be banned, and that is why the "Net Neutrality" rules have not been released.

Re:The peoples republic of...

[mysidia]

I'd be worried than when they're done with it, registering a domain name will require permission.... setting up a website in the US will require permission. Maybe registering on a website could require permission.

Re:The peoples republic of...

[Anonymous Coward]

Getting permission will require permission.

Permission

[rmdingler]

That is a crafty way to describe registered and monitored.

Re:Permission

[Anonymous Coward]

That is a crafty way to describe registered and monitored.

More importantly... taxed.

"line up in sacramento first"

[roc97007]

Alternately, don't do business in California.

Re:"line up in sacramento first"

[Anonymous Coward]

Cali wants to be a dictatorial state, let 'em. The whole state will dry up and blow away soon and this benighted attempt to control a non-sovereign borderless non-currency becomes a moot point.

Re:"line up in sacramento first"

[Anonymous Coward]

People keep saying that. California is doing fine. And will continue to do so in the future. If you lived there, you would understand.

Re:"line up in sacramento first"

[ShanghaiBill]

People keep saying that. California is doing fine. And will continue to do so in the future. If you lived there, you would understand.

I live in California, and I certainly don't understand. Every year, California becomes more and more anti-business. Companies are leaving the state. We have one of the highest unemployment rates in America. There are still many business here, including many "hubs" for tech, entertainment, aerospace, etc. But we are slowly choking the goose that lays the golden eggs.

Re:"line up in sacramento first"

[un1nsp1red]

That's why your entire population is moving ...

I wish they would move faster. 'Cause it's fucking impossible to find reasonable housing here in southern CA.

Re:"line up in sacramento first"

[Anonymous Coward]

Tell us more about what's happening in the version of California that exists entirely in your imagination.

Re:"line up in sacramento first"

[Anonymous Coward]

Maybe. Many of us move to California from Texas, though, and wouldn't move back without a huge incentive. It isn't a one way migration.

Re:"line up in sacramento first"

[SeaFox]

Alternately, don't do business in California.

NewEgg has a warehouse in City of Industry. Wonder how this will effect them.

Re:"line up in sacramento first"

[ShanghaiBill]

NewEgg has a warehouse in City of Industry. Wonder how this will effect them.

Probably not at all. This is a proposed law, and it is unlikely that it will be passed. Most bills never become law. I don't see who would benefit from this.

Re:"line up in sacramento first"

[tompaulco]

Cali wants to be a dictatorial state, let 'em. The whole state will dry up and blow away soon and this benighted attempt to control a non-sovereign borderless non-currency becomes a moot point.

Unfortunately the people who leave California due to it being so screwed up keep moving to other states and then pressing for similar laws in that state.

Re:"line up in sacramento first"

[roc97007]

I used to. I was born there. Moved out awhile back when it became apparent I'd never be able to own a house that wasn't less than a 2 hour drive from work. I did live there, and I did not understand.

Perhaps if you lived somewhere else *you'd* understand.

Re:"line up in sacramento first"

[Anonymous Coward]

Even if passed it doesn't actually affect people doing business with it at all, merely brings those that want to operate as money exchanges using bitcoin into a regulated environment. It is scary that many of the supposed experts in bitcoin have so very little understanding of financial markets and regulations, I guess that is why so much laundering and fraud happens with bitcoin exchanges.

Re:"line up in sacramento first"

[m.dillon]

Wish more people would leave, its getting crowded here. But, alas, idiotic opinions on slashdot don't translate into reality.

-Matt

Re:"line up in sacramento first"

[Anonymous Coward]

I'm an accountant, and I understand their budget predicament just fine.

Sure, they have a GDP akin to that of France.. they also have an astounding about of fucking DEBT, without the flexibility of a free standing country with which to deal with it.

Re:"line up in sacramento first"

[rtb61]

Vested interest opinions rarely make any sense, generally being based on desires and propaganda, rather than facts. It is hardly surprising that governments would ban ponzi currencies. Every time some crazy new scam comes to and end, those who thought they were going to end up get rich quick millionaires run around screaming about, freedom and the right to lie, cheat and steal and fraud is protected free speech and, and, and, what ever else they can scream about in the childish rage about being cheated from cheating.

Re:"line up in sacramento first"

[Anonymous Coward]

Stick to computing; you're a one trick pony, moron.

Re:"line up in sacramento first"

[mysidia]

People in California are reproducing at a faster rate than people are moving, so the population isn't going to be decreasing.

Re:"line up in sacramento first"

[mysidia]

Except, this one just might..... Bitcoin is one of those scary new techie things the government officials will feel a need to reign in on. Wouldn't want Californians to get hurt

Re: "line up in sacramento first"

[Anonymous Coward]

So you're saying California is like some kind of cancer, not only growing, but also metastasizing?

Re:"line up in sacramento first"

[jcr]

Or just don't tell the fuckers anything that they have no way of knowing.

-jcr

Re: "line up in sacramento first"

[geekforhire]

You nailed it. Been here for over 40 years and have owned several businesses. Each year the state comes up with new taxes and restrictions that seem aimed at killing new businesses. Hell, even Hollywood doesnt do business here anymore. Some irony in that at least. If anyone wants to know why its so jacked up here just watch the video feed of the morons in Sacramento while they are in session and just passing laws with zero input or discussion. Their standard nice is to pass a law that won't hold up in court just so they can say they did something. And of course the legal challenges cost the taxpayers millions if anyone has the money to challenge them. Boutique legislation at its finest.

Re:"line up in sacramento first"

[Mashiki]

Well they can move it to Canada. The government here doesn't really care as long as:

1) It's legal
2) If you're mining, you pay capital gains over $5k earned
3) You preform due diligence and pay your taxes if they apply on BT transactions.

Re:"line up in sacramento first"

[Anonymous Coward]

Actually, birth rate in California is below replacement. The reason that California's population is growing is that more immigrants are coming to California than Californians are leaving California. There has been net migration out of California for the past 30 years now.

http://www.nytimes.com/interactive/2014/08/13/upshot/where-people-in-each-state-were-born.html?abt=0002&abg=1

Re:"line up in sacramento first"

[Anonymous Coward]

Unfortunately the people who leave California due to it being so screwed up keep moving to other states and then pressing for similar laws in that state.

This. Colorado is becoming California 2. I'm actually preparing to leave CO and move back East to my home state as a result. I can see where this state is going to be in ten years and I want nothing to do with it. Meanwhile, back East, after decades of statist depredation, voters in MI, WI and other states have turned over a new leaf.

Re:"line up in sacramento first"

[Anonymous Coward]

the businesses that stay here in CA are all rent seeking parasitic regulation huggers. the company i work for now only exists because of regulation that CA & only 2 other states sorta have. we don't do anything other than act as a parasite; the "service" we provide is useless.

our biggest expense is lobbyists that keep pockets lined in Sacramento.

Re: "line up in sacramento first"

[drinkypoo]

Hell, even Hollywood doesnt do business here anymore. Some irony in that at least.

There's even more: the money is going from CA to .ca! It's not just leaving the state, it's leaving the country. Thanks, California, for helping to make the USA grate. California is fractally corrupt. From a distance, it looks corrupt. Then you get your nose really up into it, and it's corrupt all the way down.

Re:"line up in sacramento first"

[Kazoo the Clown]

No, it's not anti-business, it's anti-certain-types-of-business. And "small" business appears to be one of those types. But that's happening pretty much everywhere, not at all unique to California.

Re:"line up in sacramento first"

[tsotha]

I live in CA too, and I agree. The businesses that are still here are here because it costs money to move. Unless you're starting up yet another Twitter clone with someone else's money you'd be daft to start you business here.

Re: "line up in sacramento first"

[Anonymous Coward]

couldn't say it better myself

Re:"line up in sacramento first"

[GLMDesigns]

What specifically about bitcoin is a ponzi scheme? The mining operation doesn't give an advantage to early adopters and more importantly mining will slowly but surely become a secondary source of income (as opposed to getting transaction fees).

So. Again. What about bitcoin is a ponzi scheme?

Re:"line up in sacramento first"

[operagost]

Hubris. Californians keep telling themselves they are superior-- more intelligent, more enlightened-- than the rest of the country. Every day, it becomes a little more obvious that this is not the case.

Re:"line up in sacramento first"

[Anonymous Coward]

I don't even want to visit.

Re:"line up in sacramento first"

[ezdiy]

The mining operation doesn't give an advantage to early adopters

If it walks like a ponzi (early adopter with well timed exit profits massively), quacks like a ponzi (you need to recruit more suckers into the scheme to profit) and has feathers like a ponzi (greed is the main incentive to participate), most laypeople will perceive it as a ponzi.

That being said, calling it a ponzi is indeed not fair, as one attribute is not shared - ponzis or penny stocks, or whatever have no interval value at all, thus the inevitable crash to 0.

But when you tack some value to it, however dubious, (be it herbal medicine; or be magic internet payment system), and use ponzi as a carrier for viral marketing scheme, you get multi level marketing - or so called pyramid scheme. When pyramids crash, they do so to inherent internal value as determined by participant consensus.

People conflate MLM with ponzis often because of the many shared attributes. Just like recruiting for AmWay alienates your friends and family, so does bitcoin, as people realize the distribution is pretty much based on the same principle.

Bitcoin is of course here to stay, for better or worse, however I doubt it ever becomes mainstream. Too much of world population need to have this illusion of just world and will gladly accept keynesian system (with obscured unfairness) over aggresively austrian one for a long time.

Re:"line up in sacramento first"

[rtb61]

Bitcoin is doomed, not so much because of the many crooked things people associated with it do but because every con man and their dog want to start their own easy to mine at start currency and build up imaginary stockpiles of hundred of millions of dollars before releasing it to the suckers. Basically, they all end up eating each lunch and the fraudulent of impact forces legislation and because you can not legislate to include one or two crypto-ponzi-currencies whilst banning the rest, by law it is all or nothing and hence all will inevitably be banned.

Land of the Free...

[Anonymous Coward]

... where you're free to do as you're told!

yeah, California is falling apart

[NostalgiaForInfinity]

If you look at the state, it's deeply in debt and politically utterly dysfunctional. Educational performance has fallen to nearly the bottom of the nation. The infrastructure is falling apart. Taxes are sky-high. The prisons are overcrowded and an embarrassment to the nation. Everything is regulated, from putting a shed in your backyard to how the hens are kept that produce your eggs. People and businesses are moving out of the state if they can.

California weather and scenery will mean that it will always remain a playground for retirees and the wealthy. And its widespread crony capitalism will keep some corporations around. But anybody with half a brain, and anybody who actually wants to innovate and accomplish something will move elsewhere.

Re:yeah, California is falling apart

[Anonymous Coward]

not to worry... one big quake and the whole mess will slide into the ocean.

Re:yeah, California is falling apart

[Anonymous Coward]

Funny, Wells Fargo's California Economic Outlook report for last month starts off "California’s economy continues to power forward, with many of the Golden State’s largest and most important industries gaining momentum over the course of 2014."

https://www08.wellsfargomedia.com/downloads/pdf/com/insights/economics/regional-reports/California_Economic_Outlook_02242015.pdf

Re:yeah, California is falling apart

[Anonymous Coward]

of course taxes are high and schools are shit, every profitable billion dollar business is registered in the cayman islands/Luxembourg, Apple, Google, Amazon, the list of parasites is endless

Re:yeah, California is falling apart

[ArhcAngel]

And Dwayne "The Rock" Johnson will be there to save you!

Re:yeah, California is falling apart

[ArhcAngel]

Do you blame them? The US corporate tax rate is 39.1% Third only to UAE (55%) and Chad (40%).

Re:yeah, California is falling apart

[Anonymous Coward]

Baloney. People who hate on California have never lived here.

Re:yeah, California is falling apart

[Anonymous Coward]

The effective corporate tax rate is 12.6%.

Re:yeah, California is falling apart

[Creepy]

Except due to loopholes, corporations pay far less. And I quote from Citizens For Tax Justice (and I've seen far less flattering numbers, like most companies pay 5% or less, but they probably included unprofitable ones that don't pay any taxes - this study only included profitable companies).

While the federal corporate tax law ostensibly requires big corporations to pay a 35 percent corporate
income tax rate, the 288 corporations in our study on average paid barely more than half that amount:
19.4 percent over the 2008-12 period. Many companies paid far less, including 26 that paid nothing at all
over the entire five-year period. "

Re:yeah, California is falling apart

[Anonymous Coward]

> Taxes are sky-high.

Total sales tax in San Francisco, CA is 8.5%.
Total sales tax in Huntsville, AL (a seat of DoD power and not much else) is 9%.

People who make less than ~$150k/year pay significantly less in state income tax in CA than they do in AL.

And, funnily enough, CA is a *substantially* better place to live than AL.

Facts. They get in the way of a good rant. :P

Re:yeah, California is falling apart

[ColdWetDog]

Baloney. People who hate on California have never lived here.

We don't need to. We see Californians all of the time, that's enough.

Ever heard of the term "Californication"?

Re:yeah, California is falling apart

[PopeRatzo]

California weather and scenery will mean that it will always remain a playground for retirees and the wealthy

There's your explanation. They're trying to run out the riff-raff.

Re:yeah, California is falling apart

[Anonymous Coward]

With all of the horrible legislation I've been reading about being passed in California, I often wonder if it’s a deliberate effort by their legislature to run half the population out of the state to solve their water crises.

Re:yeah, California is falling apart

[drinkypoo]

I was born in Santa Cruz in the late seventies, and California has a whole hell of a lot wrong with it, most of it political. I actually miss the days when it was full of hippies, which were winding up right around the time I was born.

Re:yeah, California is falling apart

[phantomfive]

People and businesses are moving out of the state if they can.

I wish that were true. Then I could drive around the bay area on a weekend without getting in a traffic jam.

Re:yeah, California is falling apart

[Anonymous Coward]

They'll tell the ocean that it can't let California slide into it. That's how regulation there works.

Re:yeah, California is falling apart

[NostalgiaForInfinity]

There's your explanation. They're trying to run out the riff-raff.

There is a good deal of truth to that: the wealthy elderly in California are both politically powerful, and they don't give a f*ck about the future of the state.

Re:yeah, California is falling apart

[Anonymous Coward]

I wish that were true. Then I could drive around the bay area on a weekend without getting in a traffic jam.

The Bay Area isn't California. Bay Area population is still growing somewhat due to immigration and corporate expansion. But its infrastructure problems are really not all that different from what they were 20 years ago; the Bay Area has simply stagnated, through a combination of regulatory red tape, NIBMYism, and corruption.

Re:yeah, California is falling apart

[NostalgiaForInfinity]

http://taxfoundation.org/blog/...

California ranks #4 in terms of overall tax burden, just behind NY, NJ, and CT.

California also has the top marginal income tax rate in the country; even worse if you life in SF.

Facts, you should try getting them sometimes.

Oh, and if you make less than $150k/year, you are barely middle class in the Bay Area.

But you're right: economically, Alabama is pretty lousy too. The fact that California sucks doesn't mean that some other states suck as well.

Re:yeah, California is falling apart

[__aaclcg7560]

Apple has corporate headquarters in Cupertino, CA, but its cash management division operates from a shell company in Nevada, which has no corporate taxes, to avoid California's 8.84% corporate tax rate. Never mind that Apple also collects $400M in R&D tax credits from California.

http://www.businessinsider.com/how-apple-dodges-billions-in-taxes-2012-4

Re:yeah, California is falling apart

[Vinegar Joe]

That is sooooooooooo insanely cool!!!

Re:yeah, California is falling apart

[Anonymous Coward]

I hate California and I live there. Not for much longer, moving to Portland in September.

Re:yeah, California is falling apart

[Scarletdown]

And they will try to get someone to paint a warning on the Sun that it contains agents known in the State of California to cause cancer.

Re:yeah, California is falling apart

[Anonymous Coward]

Lived there 3 years. Escaped as fast as I could find work. Turns out that Denver is full of Californians who drive like they're stuck on the 405, but are still glad to be out of California.

Re:yeah, California is falling apart

[TechyImmigrant]

Baloney. People who hate on California have never lived here.

We don't need to. We see Californians all of the time, that's enough.

Ever heard of the term "Californication"?

Are we supposed to form our opinions of the pros and cons of the States based on the Red Hot Chilli Pepper's creative works?

Re:yeah, California is falling apart

[Anonymous Coward]

If you make >$100k in Alabama, you are a member of that state's 1%.

I live in the Bay Area. I have first-hand experience with what the lower to mid 100's will buy you. You'd have to be deluded to call it anything less than solidly middle-class.

The tables at taxfoundation.org are misleading. They take average income and *average* taxation level to arrive at an *average* per capita tax burden. This *isn't* the way to look at taxation. Because:

1) There (IIRC) isn't a state that has a flat income tax. Every state takes a greater percentage from its higher earners and a lower percentage from its lesser earners.
2) California's median (not average!) household income is 50% higher than Alabama's.
3) There are an awfully large number of *fantastically* rich people in CA. Very, very few rich folks live in AL. Because fantastically rich people have a higher tax burden, this raises CA's *average* per capita tax burden; but this has no bearing on the *actual* tax burden of the merely middle-class Californian.
4) In many states (but not Alabama!) sales tax is not charged on "essential" items such as bread, cheese, and milk, further lowering the effective tax burden on the poor and middle class.
5) Much of the land in Alabama is:
a) Owned by lumber companies
b) Given to those companies tax free, in exchange for jobs (further lowering the *apparent* mean per captia tax burden)

Almost all of CA is *NOT* Silicon Valley. This means that for almost all of CA, a $100k/year household income is sufficient to live a VERY solid upper-middle-class to middle-upper-class living. As I mentioned, despite Alabama's apparent lower *mean* tax burden, people who live in the parts of CA who make less than ~$150/year will be *far* better off (financially, socially, and culturally) than those making the same amount of money in AL.

It's just a fact, man.

Re:yeah, California is falling apart

[Kazoo the Clown]

No it won't, things are moving north/south at the faults for the most part. It IS becoming a dust bowl though, and many costal properties are at risk from sea level rise. But "fall into the ocean" on an earthquake, not hardly.

Re:yeah, California is falling apart

[Kazoo the Clown]

Yes, LARGE industries are doing well. It's the small ones that are getting trashed.

Re:yeah, California is falling apart

[mvdwege]

And yet all 4 of these have a GDP per capita higher than the US average. Apparently the facts say that this tax burden isn't so crippling after all.

Re:yeah, California is falling apart

[mvdwege]

I'm sorry, but a debt of 130 billion on a Gross State Product of 2 trillion hardly counts as 'deeply in debt'.

As most economic illiterates, you confuse debt with interest. Debt is irrelevant. What is relevant is being able to service that debt; California has had its troubles in that area, but mostly because idiots like you managed to shackle the government's tax-raising powers.

Re:yeah, California is falling apart

[PopeRatzo]

Not just the wealthy elderly. Just the wealthiest few percent. This is a pattern throughout a lot of coastal areas and big cities.

Re:yeah, California is falling apart

[NostalgiaForInfinity]

I'm sorry, but a debt of 130 billion on a Gross State Product of 2 trillion hardly counts as 'deeply in debt'.

California's debt at the state level is many times larger. Even Gov. Brown estimated it at $354b last year, and that's likely far too low. You have to add to that even larger local debts.

Debt is irrelevant. What is relevant is being able to service that debt; California has had its troubles in that area, but mostly because idiots like you managed to shackle the government's tax-raising powers.

What "shackles the [state's] tax-raising powers" is that people and companies leave the state when taxes get too high. There are plenty of nice places to live that have much lower or no income tax, and better infrastructure and better schools to boot. And who, pray tell, "shackles" California's tax raising powers anyway? The state is entirely in the hands of Democrats.

As most economic illiterates,

Look who's talking.

Re:yeah, California is falling apart

[NostalgiaForInfinity]

Not just the wealthy elderly. Just the wealthiest few percent.

The wealthiest few percent are predominantly the elderly.

Re:yeah, California is falling apart

[PPalmgren]

Its not about the money, its about what the money can buy. You even said it yourself with your last line:

This means that for almost all of CA, a $100k/year household income is sufficient to live a VERY solid upper-middle-class to middle-upper-class living.

100k/year in a place like Alabama affords you a 4,000sqft home within 30 minutes from best jobs and economic centers in the state. If you live in other areas in Alabama, people can afford a good middle class living on $50k/year and even less if youre smart. Support positions that don't require physical presence are frequently moved from CA to the east coast and the cost savings is on the order of 30-50% simply because of the cost of living adjustment. That's why Wells Fargo kept so many jobs in Charlotte, NC when it absorbed Wachovia.

Your income tax analysis is dishonest and lacks understanding. The CA income tax hits 8% at $60k, which can't buy jack in CA, for most citizens its at 9.3%, double the AL income tax rate. If you make under $30,000, you pay less income tax than someone who lives in AL making that amount...but you also have to pay 1% for mandatory SDI up to ~$100k, making up the difference.

BTW, for item #1 in your list, PA has a flat income tax. Why do I know all this stuff? I do it for a living. CA, NJ, and NY are the most expensive places to operate a business and have the highest cost of living adjustments, bar none.

Re:yeah, California is falling apart

[NostalgiaForInfinity]

Does a high per-capita GDP contradict any of what I said originally? No.

Do you understand that someone in San Francisco, CA, or New York City, NY, is likely economically worse off as someone in Danville, IL, doing the same job? That per capita state GDP has no direct bearing on whether people want to move into or out of a state?

But, ah, don't let facts get in the way of your political biases. I mean, why should you care how well people are doing, as long as politicians make money slosh around through the economy and get the GDP numbers up.

Re:yeah, California is falling apart

[operagost]

So your rebuttal of "taxes are sky-high" is to point out that Alabama's sales tax is higher? And cherry-pick the lowest rate out of California's heavily progressive income tax to show that income tax is also higher in Alabama? Who gives a crap about Alabama? FYI, they suck too. And who gives a crap about your red herring, which is like saying that eating dirt is OK because that other guy has to eat crap?

Re:yeah, California is falling apart

[operagost]

"I know I will be modded down for this": where's the option '-1, Asking for it'?

It's called "Flamebait".

Re:yeah, California is falling apart

[mvdwege]

California's debt at the state level is many times larger. Even Gov. Brown estimated it at $354b last year, and that's likely far too low.

Still a trifle on a 2.2 trillion GDP. And I noticed you glossed over the fact that static debt numbers are meaningless, it's the debt service that counts.

You have to add to that even larger local debts.

Nope, you don't get to do that. Local debts are the responsibility of the local authorities, you don't get to add them to the state debt. And If they have enough tax base to carry the debt service, the debt the local authorities run up is again, irrelevant.

And who, pray tell, "shackles" California's tax raising powers anyway? The state is entirely in the hands of Democrats.

Here's who and what:

1. The Republicans, because California requires a two-thirds Assembly majority to pass a budget, and they won't budge on tax increases.
2. Proposition 13.

Seriously, if I know this from an ocean and a continent away, then it is rather obvious who the illiterate is, now isn't it?

Re:yeah, California is falling apart

[Anonymous Coward]

Well, by your opinion, that puts them squarely with their politically-aligned sister states of Mississippi, Alabama, and good old Louisiana. Oh wait . . . progressives don't run those states? WTF?

Re:yeah, California is falling apart

[Anonymous Coward]

That's the republitard narrative you'd like to put forward.

California is doing just fine, and It's doing better without fucking crooks like you.

"Job creators" are fucking crooks. Exploiting. Raping. Pillaging. Manipulating. Sucking up tax breaks and ripping off their employees.

Please leave and never come back.

Re:yeah, California is falling apart

[Anonymous Coward]

No it is not. Ever since the Dems got the majority it is functional and we have a balanced budget.

Re:yeah, California is falling apart

[Anonymous Coward]

Life, you should try living it sometimes. Life is not all words you read on the Internet and Wikipedia.

"...if you make less than $150k/year, you are barely middle class in the Bay Area."

I don't know WTF you are talking about!

I live in San Jose, making $88k/year as a programmer. I have good benefits, a pension, health, dental. I live in a safe, quiet, friendly middle-class neighborhood with kids and real grass (not astroturf) and dogs. Gas is $3.30/gal and a six pack of good beer is $8.

My condo is two bedrooms, and me and my roommate pay $800/mo each. We're quite comfortable. I have thousands of dollars in the bank, and several hundred dollars each month as luxury money to spend on whatever I want.

So how exactly am I "barely" middle class?

Re:yeah, California is falling apart

[Anonymous Coward]

Yeah, but Alabama is a shit hole filled with racist shitheads. I wish it'd fall into the fucking gulf.

Re:yeah, California is falling apart

[Anonymous Coward]

Up until November 2014 they had a supermajority and still blamed the Republicans.

Re:yeah, California is falling apart

[Anonymous Coward]

So how exactly am I "barely" middle class?

me and my roommate pay $800/mo each.

Re:yeah, California is falling apart

[Anonymous Coward]

Nope, you don't get to do that. Local debts are the responsibility of the local authorities, you don't get to add them to the state debt.

I sure get to add them to state debt when talking about what the future of this state is going to be. Because when my city goes bankrupt, it affects my livelihood a great deal. Furthermore, a lot of the problems at the local level are caused by state and federal mandates.

(I'm sorry if all these levels of government are a too complicated to understand for someone whose country has a GDP smaller than that of a major US metropolitan area.)

The Republicans, because California requires a two-thirds Assembly majority to pass a budget, and they won't budge on tax increases. Proposition 13.

Evidently, your understanding of US politics and taxation is rather deficient.

And I noticed you glossed over the fact that static debt numbers are meaningless, it's the debt service that counts.

Is that what they teach in Dutch schools?

Seriously, if I know this from an ocean and a continent away, then it is rather obvious who the illiterate is, now isn't it?

It just shows how desperate you are at rationalizing your own situation and that of your country, because whatever is wrong in California is even more wrong in your country.

Re:yeah, California is falling apart

[Threni]

" how the hens are kept that produce your eggs"

Er... What's wrong with ethical farming? It would be nice to think that you'd not need laws for that sort of thing, but apparently some countries need laws to stop people from discriminating against people with different colour skin so you can't leave everything to the marketplace.

Re:yeah, California is falling apart

[NostalgiaForInfinity]

Er... What's wrong with ethical farming?

Did I say anything was "wrong" with it?

but apparently some countries need laws to stop people from discriminating against people with different colour skin so you can't leave everything to the marketplace

What is far more important than laws is awareness. Most countries other than the US are populated by such arrogant idiots whose heads have been filled with such b.s. that they seriously believe that discrimination and racism are less of a problem in their countries than in the US, that they ignore a long history of genocide and ethnic cleansing that produced their current societies, and that problems get solved by passing laws against them. You're a prime representative of those delusions.

Re:yeah, California is falling apart

[Anonymous Coward]

Except due to loopholes, corporations pay far less. And I quote from Citizens For Tax Justice [ctj.org] (and I've seen far less flattering numbers, like most companies pay 5% or less, but they probably included unprofitable ones that don't pay any taxes - this study only included profitable companies).

There's no reason for corporations of businesses to pay any taxes at all. It simply opens up a huge door for political corruption, meaning that politicians get money or favors in return for add even more rules to the tax system.

We're already taxing the income the corporate employees make. If we need to, we can treat money sent overseas by businesses as income (which would typically mean taxing it at the highest rate). Spend the money here, or pay more taxes. We also tax the income from sales of stock, which gets the US investors, and we can surely come up with something special to include the foreign investors. If they want to invest in stocks traded in the US, let them pay US taxes on their gains.

We don't need to be double or triple taxing things: it effectively hides taxes from the public, since the taxes get passed on to consumers hidden in the increased cost of goods and services. This in turn hides the true cost of government (and leads people to believe they can have a socialist state without paying for it, or without understanding how much it will really cost). It also royally screws the poor, who end up getting hit with cumulative taxes as multiple businesses in the chain of production and logistics all have to charge more. For example, that plumber who fixes your pipes has to pay more for tools, for gas, for food, for clothing, and so forth, so you get charged more as a result.

As a result of taxes on businesses, there's also a tendency for businesses to produce shoddy goods that won't last very long, another thing that royally screws the poor.

Take furniture: in many cases, all kinds of corners get cut so businesses can still make a profit after taxes. Unless you've got a strong woodworking education or something similar you probably won't realize this before you make a purchase, but you'll find most things falling apart after a few years. The wealthy can afford to pay for the high quality stuff that will last centuries (and can be repaired if it gets damaged), the woodworkers can build it for themselves, everybody else is hosed. In the old days, the poorer segments of society could get good quality things second hand, not so much any more: not enough of the good stuff is made.

Same thing applies to clothing, cooking supplies, tools, and many other things that everybody needs.

Of course, these simple considerations somehow get neglected by the "citizens for tax justice", who apparently operate by a different definition of justice than the rest of us. In their minds, screwing the poor is apparently ok, as long as we are taxing the corporations in some "fair" way.

If the income tax system isn't producing the right amount of income, operate fewer government services or raise the taxes. Another option is to vastly simplify the tax system (which doesn't mean it has to be a flat tax): all kinds of corruption can hide in a complex tax system, not so much in a simple one, meaning the government's take is a lot lower than it could be, especially at the upper income levels. Let all those accountants and tax attorneys switch careers: there's plenty of other stuff that needs doing, we don't need an artificially complex tax system just to keep people employed.

For that matter, an artificially complex set of tax laws is completely incompatible with any reasonable notion of ethical practice of law. If you want ethical lawyers, you can't have lawyers (the bar associations) lobbying other lawyers (the politicians and government executives) to write laws with unnecessary complexity, and then yet more lawyers prosecuting those unethical laws, and then more lawyers (the judges) upholding those laws as somehow valid.

Re:yeah, California is falling apart

[Threni]

Not really, i'm talking about chickens. Must have used a trigger word or something.

Re:yeah, California is falling apart

[Anonymous Coward]

Not really, i'm talking about chickens

You're talking nonsense, that's what you're doing.

Must have used a trigger word or something.

Just trying to explain to you why your "apparently some countries need laws to stop people from discriminating against people with different colour skin" comment is nonsense. Apparently, you're a typical Eurocentric bigot and hence a lost cause.

California = a good place to be formerly from.

[Anonymous Coward]

Sadly, California persists in setting examples of government regulation run rampant.

Why exactly this is I am not sure, but I know I'd never choose to live there because of
how messed up the CA state government has been and continues to be.

It does seem like Californians might be masochists, because they seem to continually elect
those people who saddle them with onerous regulations. Maybe they need to make a movie
about it.

Re:California = a good place to be formerly from.

[Anonymous Coward]

I just came to New York to work on WallStreet rather than move to Cali.

I'm skilled as hell and wanted badly by all the big businesses and I straight tell them that I'll never move to Cali.

I'm a gear head with very highly modified vehicles that run upwards of 40psi of boost and nearly 900 horsepower. In California I can't even put a non-approved air-intake on my car.... Let alone get a 2.0 liter 4 cylinder to put 900 horsepower to the ground with four wheel drive. According to California I need to be paying six figures to get a fast car, not allowed to make a $40K car wicked fast with $30K put into modifications and massive turbochargers. All vehicles must be stock. What bull.

What's the point of making money if I can't spend it on my passions? I work to make money to buy toys and California outlaws everything I may want to do. So I keep my talent elsewhere and tell their businesses straight up that I'll never live there but if they have offices in another state I'll interview.

I hope eventually people realize all the truly talented who can go anywhere would rather live in *anywhere* but there.

Re:California = a good place to be formerly from.

[Khyber]

"All vehicles must be stock. What bull."

As someone that lives in CA with a modified 750 Mercer (1950s Coventry Climax engine in it) I'm gonna say you're the one full of shit, child.

You just got pulled over because your shitty ass mods were INCORRECTLY INSTALLED. Like your fucking illegal shit-quality PINK HIDs with an excess amount of blue that hurts people's fucking eyes.

4 Cylinder at 900 horsepower? Man you're so full of shit even the noob tuners know better.

BTW We've got car shows with street exhibitions every other weekend. Tons of modified vehicles, all street legal.

Go try your lying bullshit on a FOX News forum, instead, fag.

Re:California = a good place to be formerly from.

[drinkypoo]

All vehicles must be stock. What bull.

Yes, that is bull. As in, you are full of shit. Not only does California permit you to run pretty much anything you like if you get it approved, but California will actually let you build one full-custom vehicle in your life and drive it without crash testing, something you can't even do legally in most states. It has to have all the basic safety equipment and pass an inspection but it doesn't have to meet any of the federal crash test standards. It just needs a windscreen and a floor pan, brakes, signals, etc.

If you want to run a non-CARB-approved header, you need to see a smog referee, and that is annoying but it doesn't actually prevent the use of custom-manufactured parts.

So in fact, you are just lying. No surprise you didn't log in, coward.

Unconstitutional?

[NotQuiteReal]

I mean, if is approved for political donations how can California ban it?

Re:Unconstitutional?

[NicBenjamin]

The guy who wrote the original piece does not understand the Legislative process. He does not understand bills.

This particular law is supposed to make any BTC-based business acting like a wire-transfer service follow the same laws dollar-based-witre-transfer-services follow. Since paying for things, and accepting payments, do not result in you having to register you McDonald's as a wire transfer service and comply with financial regulations; most BTC-using businesses will be fine.

If you were setting up a newer, better Mt. God, or a tumbler, or something like that you've got extra paperwork.

Re:Unconstitutional?

[Anonymous Coward]

What about World of Warcraft?

Eve Online?

You can transfer funds into and out of Second Life's Lindon Dollars, FFS.
The "virtual currency" debate is as bogus as the "virtual property" BS.

The thing is: Citizens SHOULD be allowed to trade via whatever means they desire, despite what the moronic laws state. Try taxing, "I'll fix your car if you mow my lawn." Imposing a tax should be based on the actual benefit provided to the citizens. We built will build X roads and Y schools if we raise Z dollars, that would be Capitalism. America does not have a Capitalistic government.

Re:Unconstitutional?

[bloodhawk]

Citizens ARE allowed to trade in whatever means you desire. however those that operate businesses have reporting and legal obligations. you can trade in potatoes and Spanish onions as your currency if you want, but even then expect regulations if you make transfers between people and in and out of other currencies possible.

Re:Unconstitutional?

[Anonymous Coward]

This does not matter at all.
Bitcoin is a completely new greenfield oppurtunity and a massive chance for real world change.
You should be out in the streets politically protesting, voting against, calling your reps, blowing up their damn phones, fax machines and emails about any kind of bullshit "licensing".
This is your ONE LAST CHANCE to get things right.
FOR GODS SAKE, don't just sit on your ass and let the OLD WORLD start passing bills to maintain their HEGEMONY and CONTROL over YOU!!!

Re:Unconstitutional?

[NicBenjamin]

To figure out the exact implication for those folks you'd have to get a finance guy and a lawyer to read the bill.

I suspect that the applicability would depend on how easy it was to turn those dollars into real money (i.e.: if you can withdraw Linden Dollars as USD it's a problem), and how common hacks around the system are. So if people start using their Second Life accounts to wire money to the cousins in Peru it's likely Second Life will have to comply.

Regardless, if you're as rich as Blizzard you damn well better have the budget to pay for regulatory compliance that most check-cashing places do. If you're a start-up and you don't have that budget things will be complicated, but more then one startup has managed to avoid paying to deal with some regulatory hurdle until they were rich enough they had no excuse.

Re:Unconstitutional?

[Anonymous Coward]

That.

And this too shall pass - the drunken ramblings of an AC not withstanding, it is the way of the world. For now.

Re:Unconstitutional?

[MobSwatter]

Hey now, some of us do not use AC while practicing our drunk computing...

Re:Unconstitutional?

[drinkypoo]

Try taxing, "I'll fix your car if you mow my lawn."

What? That's not even a difficult example. You value the car repair based on the flat-rate time estimate and the average price of auto repair in your region, and you value the lawn mowing based on the average price of getting that done, and then you tax people accordingly. Note I'm not saying that this should be done, only that it's easy to value if you are informed about the activity.

Re:Unconstitutional?

[Joey Vegetables]

I think the point was that there is no way for even a fairly powerful state to know that he fixed your car and you mowed his lawn, unless unless one of you decides to rat on the other, and it is in both your interests not to do so. In fact, the IRS considers barter to constitute taxable income but this is so difficult to enforce that I've never heard of a case of it happening.

Re:Unconstitutional?

[bloodhawk]

barter agreements aren't always as trouble free as many think. you run the risk of not just the other party reporting the income but also someone else finding out and reporting. My brother ran afoul by the person he had bartered with deciding he had a loss on his business so it was in his interest to report the income and costs in the exchange and he did so without telling my brother leaving my brother with a nasty letter from the tax department of please explain.

Re:Unconstitutional?

[Joey Vegetables]

Agreed. It is my policy to report any nontrivial income no matter whether I think they will find out about it or not. Not because I think honesty requires it . . . I view government in its present form as little more than an extortion racket . . . but because frankly it is easier not to have to live with the constant fear of "what if the IRS finds out . . . ".

As stupid as bitcoin is

[Anonymous Coward]

The idea of lawmakers, who are perennially stupid when it comes to technology, making laws about anything tech related is reason for pause.

Re:As stupid as bitcoin is

[Sowelu]

As is the idea of tech blogs, which are perennially stupid when it comes to actually understanding the legal system, posting articles without understanding the subject matter. If you read the text it mainly says "if you're going to act like a bank, we're going to regulate you like a bank, even if you claim cryptocurrency makes you immune because it isn't real". I don't see how it seems unreasonable. Given bitcoin exchanges' track records it seems like a downright good idea, and it might help shake off the terrible reputation that bitcoin has outside of crazy people.

Re:As stupid as bitcoin is

[drinkypoo]

If you read the text it mainly says "if you're going to act like a bank, we're going to regulate you like a bank, even if you claim cryptocurrency makes you immune because it isn't real".

So to be clear, they're going to let people lend against bitcoin? Because what makes a bank is that they're allowed to take your money and then loan it out multiple times.

Re:As stupid as bitcoin is

[Anonymous Coward]

Ok, I'll bite: so how does Paypal get around these regulations?

Re:As stupid as bitcoin is

[Anonymous Coward]

so how does Paypal get around these regulations?

Why would PayPal risk trying to "get around" any regulations? A respectable business operates within the same regulatory framework all other respectable businesses do.

As regards these regulations, If PayPal deals or wants to deal in crypto-currencies, it would register, easy!

Re:As stupid as bitcoin is

[Anonymous Coward]

By declaring themselves not a bank. Though they've been forced to come into compliance as a "money transmitting service" in various states. I believe there European operations are considered “banking” so EU residents have some protections that afforded to customers of banks. I don't know if they operate directly as a bank none-the-less or merely partner with bank(s). In the US they partner with banks to provide things like debit cards. In any event when they say they are not a bank what they are saying is they can take your money and you have no recourse against it. It's not FDIC insured.

Re:As stupid as bitcoin is

[Anonymous Coward]

by "these" regulations if mean the virtual currency, they get around them by not actually trading in virtual currency. If you mean financial regulations, they DON'T get around them, they have to follow them. If you mean the banking regulations, they are not a bank though they do have to follow many of the reporting regulations banks follow as well.

Re:As stupid as bitcoin is

[itzly]

You can't loan out bitcoins multiple times. You can, however, make a paper bitcoin certificate and loan that out. The trick is convincing people that this bitcoin certificate is actually worth something.

Re:As stupid as bitcoin is

[DERoss]

I believe PayPal is already registered. Any company in the business of transferring money must register. Existing California laws require this in response to a number of cases where money-transfer businesses received payments but failed to transfer them, either because they went bankrupt or were just plain frauds. The new law merely proposes to include bitcoin transfer businesses within that same regulatory framework. This is NOT blocking bitcoin transfers; this is protecting consumers who want to transfer bitcoins.

The author is not an American...

[NicBenjamin]

Or is so unfamiliar with the US Political process they really shouldn't be commenting on bills. In Westminster-style democracies a bill being introduced by the government has a virtually 100% chance of becoming law, so it's very important when such a bill is introduced. But in the US there is no body in the state Legislature with the same role as the Prime Minister and his Cabinet, so all bills are the equivalent of Private Member's Bills in Canada/the UK/etc.

Which means that it's very important to know who sponsored this bill? Are they a Republican or a Democrat? What's their political point of view on the issue? What are their relationships with the rest of the State Assembly? The Senate? The Governor? These are all very important facts that the original story does not tell you, probably because the author does not know how the US Legislative process work.

The answers seem to be this was authored by Matt Dababneh, who represents a slice of the "Valley Girls" Valley in greater LA. He's a Democrat. The latter is good for the bill's odds of passage, the fact he has no Senate cosponsor is not because if it's not introduced in the Senate it can't become law. His point of view seems to be that you can use Bitcoin as a money-transfer service so any business based on changing dollars into BTC should follow the same banking rules that write-transfer services do.

Re:The author is not an American...

[Anonymous Coward]

So true. In American style republics the President vetoes all bills and rules by Executive Order instead. God bless Lincoln and all Tyrants who followed him.

Re:The author is not an American...

[Anonymous Coward]

Its a story pushed by a Bitcoin shill. Of course the author knows nothing about politics or finance.

Re:The author is not an American...

[stephanruby]

...the fact he has no Senate cosponsor is not because if it's not introduced in the Senate it can't become law.

Can someone explain this quadruple negative? I'm not sure I understand it.

Re:The author is not an American...

[mjgday]

Bah you're a bunch of killjoys!

I was gunna be all "lol!!!! Land of the Free?!?!?! lol!!!" but you've gone and pissed in me chips by being all sensible and that.

Re:The author is not an American...

[Richard_at_work]

Reads well to me - to become law it needs to be passed in the Senate. To be passed in the Senate, it needs to be introduced by a Senator, no one else can introduce a bill into the Senate. And this bill has no Senator signed on as a sponsor of the bill, so it can't be introduced into the Senate, so the Senate cannot pass it, so it cannot become law.

WARNING:

[Irate Engineer]

Bitcoin contains features known to the State of California to cause untraceable transactions, speculation, and other financial harm.

Re:WARNING:

[nomel]

> cause untraceable transactions

And this differs from cash, how? And...what's so untraceable about bitcoin, considering every transaction *permanently and publicly stored*. It's such a pain in the ass to anonymize, that even Dread Pirate Roberts seemingly got sick of it.

Re:WARNING:

[Registered Coward v2]

> cause untraceable transactions

And this differs from cash, how? And...what's so untraceable about bitcoin, considering every transaction *permanently and publicly stored*. It's such a pain in the ass to anonymize, that even Dread Pirate Roberts seemingly got sick of it.

WhilenI agre with your comments re: Bitcoin anonymity it does differ from ash in that I need to actually hand you cash rather than make a payment from McD's via free WiFi. cash transactions are limited by the need to to a face to face exchange.

Re:WARNING:

[nomel]

Not when you fold your bills into little paper airplanes, and deliver via well aimed transfers from the tops of sky scrapers. BRING IT!

Re:WARNING:

[tsotha]

I think the financial harm they're most concerned about has to do with tax evasion.

Re:WARNING:

[david_thornley]

Probably also money laundering. We know there's been some fairly large-scale use of bitcoin for illegal commerce.

IANAL ...

[PPH]

... but I think states lost most of their powers to regulate currencies and securities to the federal government a long time ago.

Re:IANAL ...

[CraigCruden]

It is not considered a currency -- or you would run afoul of other law.... and it is not a security otherwise they would have run afoul of reporting / tax regulations....

Re:IANAL ...

[PopeRatzo]

And therein lays the rub. Bitcoin wants to establish itself as neither fish nor fowl, yet seeks to become both.

Banking laws historically have been among the most useful of all laws. We only have to look back to what was going on before there were comprehensive banking laws, and what happens when we try to have "reform" of the banking laws (the 2008 worldwide crash).

If you can't trust bankers to behave, why would anyone trust a bunch of skeevy ubercoin types?

Re:IANAL ...

[Black Parrot]

I'm surprised the feds haven't banned it. IIRC th constitution prevents the states from creating money other than gold or silver coin; surely they won't allow individuals more leeway.

All I can figure is that it's considered more like a credit card than money. Or else the hammer just hasn't come down yet.

Re:IANAL ...

[moeinvt]

"Banking laws historically have been among the most useful of all laws."

No laws are useful if the government refuses to enforce them. Leading up to 2008, they weren't even enforcing laws against fraud being perpetrated by bankers. They were definitely ignoring rampant securities fraud with the CDS and MBS stuff. In the midst of the disaster, the FDIC refused to follow its "prompt corrective action" mandate. Government also refused to investigate and prosecute thousands of instances of forgery, perjury and the filing of false affidavits related to the mortgage loan mess. Utter and complete fail by the government.

I'd rather have an unregulated system and knowingly accept the risks than have a federal government "regulated" banking system where you never know if the regulations will be enforced. I guarantee that if we had a free market banking system, I'd be earning more than 0.25% on my money market accounts. How good are federal banking laws when everyone who saves is being robbed on a daily basis?

Re:IANAL ...

[david_thornley]

From the Feds' point of view, bitcoin isn't money. It's an asset that you can use in barter. If you and your associates want to use something else as a medium of exchange, that's cool, but you do need to keep your tax accounts in dollars. Also, no US government will accept bitcoin for payment, nobody's required to accept bitcoin as payment of a debt, and no court will award damages or levy fines in bitcoin.

Re:IANAL ...

[PopeRatzo]

Leading up to 2008, they weren't even enforcing laws against fraud being perpetrated by bankers.

The most applicable laws had been repealed by the Gramm-Leach-Bliley Act of 1999.

Bzzt! Will be thrown out.

[Anonymous Coward]

I'm pretty sure it falls under Federal banking laws, as well as Interstate Commerce clauses. As much as I hate to give the Federal Gov ammunition, California is being a silly nanny state on this one.

another excuse to allow monitoring of californians

[Anonymous Coward]

to ensure they are not using bitcoin

easy solution

[Anonymous Coward]

let's just kill the idiot who came up with this and move on with our lives

Re:easy solution

[sumdumass]

That'd a good way to get otherwise reasonable people to pass laws like this and worse "in the memory of". Its about the same with threats because with their armed state police or secret service guards at their side, they will want to prove you cannot intimidate them with threats.

FALSE HEADLINE

[Anonymous Coward]

From the text of the bill:

26004. The following are exempt from the licensing requirement described in Section 26002:
(6) A merchant or consumer that utilizes virtual currency solely for the purchase or sale of goods or services.

This bill has nothing to do with people who wish to buy or sell goods or services in bitcoins. It is intended to regulate bitcoin exchanges, presumably to avoid another Mt Gox scenario. The bill is still in its very, very early stages, and so I'm sure there are problems with the verbiage. But the headline and summary are absolute bullshit, intended to drive readers into an anti-government rage, and thus generate clicks.

Re:FALSE HEADLINE

[PopeRatzo]

This bill has nothing to do with people who wish to buy or sell goods or services in bitcoins. It is intended to regulate bitcoin exchanges, presumably to avoid another Mt Gox scenario.

Damn you and your facts!

Re:FALSE HEADLINE

[Anonymous Coward]

Fuck em. You need exchange regulation to ensure the exchange is doing exactly what it says it is. You do NOT need AMLKYC bullshit to keep everyday little people from getting into and out of bitcoin in sub $1000 or sub $500 amounts. PROOF: You can walk into any Money Order place in AMERICA, hand them up to $500 or $1000 depending on the place, and walk out with a Money Order in your hand. NO ID, NO name, NOTHING.
They are trying to CREEP IN more laws on your ass where NONE exist today. Example, exchanges that "require" you to send them a copy of a utility bill or some other "proof" of address... NOT EVEN BANKS REQUIRE THIS. All they do is *look* at your DL and SS card.
You need to FIGHT THIS ever encroaching control bullshit over your lives.

Re:FALSE HEADLINE

[Capsaicin]

... intended to drive readers into an anti-government rage, and thus generate clicks.

And boy does it work!

Baning interstate commerce?

[Billly Gates]

Last I checked that was unconstitutional. Feds make these rules and laws

Re:Baning interstate commerce?

[PopeRatzo]

Last I checked that was unconstitutional. Feds make these rules and laws

Nope. The proposed state law doesn't regulate a currency. It regulates a business and that is not unconstitutional.

I'm curious. Where exactly did you "last check"?

Re:Baning interstate commerce?

[Billly Gates]

The amendment is based not on currency but one state imposing tariff or banning products from another. Since trading is commerce they are banning something produced in another state or country

Re:Baning interstate commerce?

[Registered Coward v2]

I'm curious. Where exactly did you "last check"?

Fantasyland, where they sky can be any color you want.

Re:Baning interstate commerce?

[PopeRatzo]

Since trading is commerce they are banning something produced in another state or country

Are you saying bitcoin is a product?

Re:Baning interstate commerce?

[dcw3]

Are you implying that the use of Bitcoin isn't commerce? If it is, it clearly falls under the purview of the federal govt. and interstate commerce rules.

Re:Baning interstate commerce?

[david_thornley]

Are they? The bill doesn't try to stop people from buying and selling in bitcoin (which would be primarily interstate commerce), but regulates California bitcoin exchanges.

Re:Baning interstate commerce?

[PopeRatzo]

Are you implying that the use of Bitcoin isn't commerce?

I'm implying that state governments can also regulate certain activities. Their regulations might not supersede Federal regs, but they can certainly do it.

The problem with the Cuckcoin is that they believe that they have come up with some magic sauce that allows them to do whatever they want to circumvent borders and regulations and be guaranteed profits forever and ever. Because crypto.

Re:Baning interstate commerce?

[dcw3]

Still sounds like it would be at odds with:
The “Dormant” Commerce Clause ultimately means that because Congress has been given power over interstate commerce, states cannot discriminate against interstate commerce nor can they unduly burden interstate commerce, even in the absence of federal legislation regulating the activity.

Any state law which affects interstate commerce must be:

(1) rationally related to a legitimate state concern and

(2) the burden on interstate commerce must be outweighed by the benefit to the state’s interests.

Shut up and drink your kool-aid

[fragMasterFlash]

What could possibly go wrong?

My state does that...

[hey!]

... with barber shops. You need a permit, and to take an exam which shows you know how to avoid electrocuting your customers with the electric clippers, and how not to transmit ringworm or scabies.

Radical stuff.

Re:My state does that...

[dissy]

My state does that ... with barber shops. You need a permit, and to take an exam which shows you know how to avoid electrocuting your customers with the electric clippers, and how not to transmit ringworm or scabies.

Rats, I knew I should have checked with a lawyer before opening my Joe's Barber Shop and Scabies Quartet franchise!

Thanks "ripple"

[Anonymous Coward]

This law is being pushed by OpenCoin the company behind Ripple, a centralized cryptocurrency that wishes it could compete with Bitcoin.

Ripple was basically DOA, no one in the cryptocurrency sphere finds yet another centrally administered system to be all that attractive, and eventually they ran out of money to keep pumping themselves up with paid hype. But if you can't beat 'em, legislate them out of existence seems to be their dying gasp now.

retarded article

[bloodhawk]

This looks like a simple case of a blogger not knowing what the fuck he is talking about. Nothing being banned in the legislation, seems to merely be trying to ensure virtual currency is regulated in the exact same way as dollars. If anything you could say this is a positive for bitcoin, but it seems the tards that support bitcoin look at anything that takes away there opportunities for fraud and tax evasion as the government stomping on their god given rights.

it's a matter of public safety

[superwiz]

They are just evacuating the state in anticipation of a series of earthquakes. They are looking for as many people to get the hell out as possible.

Anyway ...

[CaptainDork]

... it's Bitcoin.

The only thing that makes less sense than Bitcoin is this goddam bill in California regarding it.

Is Bitcoin a currency or commodity?

[SeatcheInpericulisau]

Bitcoin started at low point, relative to the US Dollar. It has thus risen in value as more people use it. Thus, as bit-coin has rose in use, so has it's value. Given that the bit-coin rises in value, relative to its use, means that it is a commodity. Therefore, the term, Bit-coin is both misleading by appearance of its name, and treacherous at heart. Kill the beast whilst it's still an infant, and it'll rot, as it should, as a dubious jewel, not unlike fools gold.

Outlaw All Non-Electronic Transactions

[l0ungeb0y]

After all, what is a "virtual currency" but a "good" to be exchanged? All in-game credits should be prohibited from being used to pay for items outside the game or being exchanged for cash Trading goods or services for other goods or services? Also should be illegal, since how can the Government monitor such transactions? Cash should also be made illegal, since it can not be immediately tracked and might be used for nefarious purchases and most importantly, privately held cash destabilizes our glorious economy by keeping it out of the hands of the almighty Financial Institutions who can use it to invest in hedge funds and conduct other sound business practices like lending it out to other large institutions or buy up massive tracts of property to mortgage to Wealthy Chinese Citizens thereby keeping our economy strong.

The only legal means of paying for goods or services should be with a Chip and Pin implant on your hand or forehead.

Don't let the door hit your ass on the way out

[Anonymous Coward]

it's deeply in debt

Nice try. We elected a Democratic governor, so the giant debts from the era of the previous republican adminstration are gone. hello surplus! Thanks credit upgrade!

Line up in Sacramento?

[Anonymous Coward]

Or just leave the state.

Sales Tax != Total Tax Burden

[Anonymous Coward]

Cherry picking a single fact to make a claim, what a shock. Now check State Income Tax, city tax, property taxes, fees for home inspection and property maintenance, etc.. Yeah, facts suck your argument down quickly.

Many merchants never touch a bitcoin

[perpenso]

NewEgg has a warehouse in City of Industry. Wonder how this will effect them.

It probably wouldn't even if passed. Many merchants who "accept" bitcoins in fact never touch them. They pay a bitcoin exchange to do so. The merchants tell the exchange the $ amount. The exchange creates a payment address and a BTC amount to give the buyer. When the coins show up at this address and are verified the exchange credits the merchant's account for the exact amount of $ originally stated by the merchant. The merchant does all pricing and accounting in $ and has no risk from BTC price fluctuations.

It seems the only thing necessary would be for the exchange not to be in California.

Re:Many merchants never touch a bitcoin

[Anonymous Coward]

So... Wouldn't the bit coin exchange be barred from doing business with those Californian companies??

Re:Many merchants never touch a bitcoin

[perpenso]

So... Wouldn't the bit coin exchange be barred from doing business with those Californian companies??

Why? The business and the exchange did not perform any transaction in bitcoins. The business asked the exchange to collect some number of dollars from a person, much like they ask VISA to do so. Only the exchange and the buyer are performing a transaction in bitcoins.

Re:Many merchants never touch a bitcoin

[drinkypoo]

So... Wouldn't the bit coin exchange be barred from doing business with those Californian companies??

That would clearly be stepping on the toes of the feds, because it would clearly be interstate commerce.

Owners of bitcoin, quit trying to hide

[Anonymous Coward]

I think its stupid that people who purvey bitcoin are always hoping that people will flock to their currency while at the same time screaming that people are stealing their rights away when the powers that be want to regulate it. They want a golden currency without regulation and then complain when something like Mt. Gox happens and someone steals all of their coins. Who to they complain to? The government. So what does the government do? Try and control it. Another reason why people love bitcoin is to buy things that are banned buy government and to avoid taxes. You don't have to have a crypto-currency to avoid taxes, the mafia does it all the time.

It's only a currency if you think it is.

[thieh]

I'd like to see them ban barter for everyone who didn't get "permission" first.

This is the asshole we need to fire.

[jcr]

The power-grabbing motherfucker who proposed this bill is:

http://en.wikipedia.org/wiki/M...

No info on who put him up to it, but this scumbag's got to go.

-jcr

Outlawing Everything

[Anonymous Coward]

I am just wondering when the California government will outlaw all businesses, like Venezuela has done.

The Land of Fruits and Nuts...

[Anonymous Coward]

They ban things until they figure out how they can tax the crap out of them.

Cash is Traceable

[Anonymous Coward]

Each bill has a unique ID printed on it. You withdraw it from a machine which scans it. You take this to a store. At the end of a period they deposit it with an institution that again scans the ID.

Assemblyman Dababneh.

[Anonymous Coward]

let's just kill the idiot who came up with this and move on with our lives

It was Assemblyman Matt Dababneh of the 45th district, which is Los Angeles County District 3 - basically, Encino.

He's Chairman of the California State Banking and Finance Committee.

In case you care, it has been reported online that supposedly Mt. Gox principals Collins-Rector, Shackley, and Brock Pierce (also associated with the Bitcoin Foundation, shared a mansion in Encino, and the Assemblyman has decided to take it personally.

I still think that give federal seizures of bitcoins in the past - and subsequent sale, but the government - means that it would be federally regulated, and not subject to state regulation.

Naw all it means is to never incorporate in Califo

[Anonymous Coward]

Not that I would ever start a California corporation in the first place. California has mostly good weather and all the IT talent is in the SF bay area but other than that it is a shithole. Go check out places like Stockton or Watsonville and you will know what I am talking about. What this proposed law might mean is you are not able to do bitcoin transactions with customers in California. It doesn't mean that your company which is a Delaware Corporation even with headquarters in Sunnyvale, CA can process bitcoin transactions if need be out of datacenters in Oregon and Virginia. In fact all the software for that can still be written in California and your ops/site reliability people can work from California as well. To hell with Sacramento.

Makes sense!

[Anonymous Coward]

Given that bitcoin is the currency of choice for drug addicts, it makes sense that we have these restrictions.

Bitcoin is another technology that had potential before drug users perverted it into something negative. We can't have nice things as long as potheads are out there trying to find ways to distort tech for their own selfish, self-harming needs.

Looks like they've learned nothin

[Karmashock]

... you can't really stop a currency like this... that's sort of the whole point. You can make it less convenient but you might also make the process by which it operates even harder to monitor.

Also, the legality of such a law is dubious.

Courts hate vague legislation

[sabbede]

Too vague or too broad are two things that almost guarantee a law will be struck down. I don't think this will survive the inevitable challenge.

Good

[Anonymous Coward]

Show those internet shit nerds who's the boss. It's high time the Real Worlds descends upon those neckbeards with a vengeance. Stomp on them with laws, regulations and taxes. The "online community" must be brought to heel.

Same Old

[JimSadler]

And just where does a transaction take place? If a citizen of California goes online and buys bitcoins in Virginia where does the transaction take place? From what I can see that issue is a legal nightmare to begin with. Maybe California could rule that no business inside California is allowed to accept bitcoins but what about businesses that have branches in several states? I don't see this working out well without creating all kinds of agencies and laws to enforce such nonsense.

Re:Same Old

[david_thornley]

A transaction involving a bitcoin exchange in California may be regulated by California law. Trying to pass some sort of stupid law to prevent bitcoin transactions would be not only pointless, but an attempt to regulate interstate commerce.

World of Warcraft Not Affected

[DERoss]

The proposed law specifically exempts gaming pseudo-money. Section 26000 of AB 1326 states: "Virtual currency shall not be construed to include digital
units that are used solely within online gaming platforms with no market or application outside of those gaming platforms."

FUDD

[DERoss]

(FUDD = fear, uncertainty, doubt, and disinformation)

Money-transfer businesses are already regulated in California as the result of several such businesses failing. The proposed law merely adds bitcoin-transfer businesses to that category. This is a consumer-protection proposal in an attempt to prevent another Mt. Gox.

Easy To Enforce A Bitcoin Ban In CA

[BlueStrat]

Just mandate that any/all electronic devices capable of mining or transferring Bitcoins be licensed & registered, with regular inspections and tamper-evident seals on the case/housing of the devices, and California-approved software installed to monitor and report any Bitcoin mining or transfers.

As a bonus, California can also use the inspections and monitoring software to detect and prevent all manner of criminal acts.

See? Easy! /s

Strat

Why do we care that much about Bitcoin?

[Ravaldy]

Why would I want to convert controlled currency for uncontrolled currency?

Is controlled currency that flawed it warrants an unmanned system?

If bitcoin took off, don't you think the same people who tainted controlled currency will taint uncontrolled currency?

This could be just the thing...

[DriveDog]

...that pushes cryptocurrencies into truly anonymous exchanges. Up to now, most that demanded anonymous exchanges were trying to hide something. A few were Libertarians who just wanted privacy on principle. The rest just wanted to try it or to use it for convenience. But if the state tries to control all usage of it, that will drive most uses to demand anonymity, and solid means of achieving that will appear.