That attitude is very useful for employers to keep down wages, too:) I suspect that's why the system persisted, despite the rich hating it and the rest being reluctant to admit that they used it. It's a useful tool for labor unions.
Yes, but labor unions in the 21st century are evil.:)
Ok, I get why they came into existence, employers were abusive in the past, but today we have a very different legal environment and real employee protections which didn't exist back then.
Cash transfers are property transfers too, and property is an institution between society and individuals.
Ahh, it is? I'm not sure I'd agree with that. Property is private, my property is my business. Yes, we do have deeds and title to property to track ownership and resolve legal disputes, but that is between myself and the state, not society.
Maybe I'm just more individualistic than you are.
You can go down to the courthouse and see that I own my house, but you can't see how much money I make or look at my tax returns. If I really cared about the house part, that can be hidden as well, I could have a shell company purchase the house to keep my name out of it.
Funny...:) 150 down / 65 up is reasonable, however they do offer faster here, they just charge a ton for it and I'm not ready to pay quite that much.
Our local equipment can handle gigibit today, but I believe the most they actually sell to a single home is 500 down, 200 up. Costs more than $200 a month however last time I looked. As it stands, I pay $90 a month for 150/65.
That is true, ping times and latency do matter. Thankfully my local FIOS has pretty good latency, it is nice.
One benefit of fast downloads isn't obvious until you think about it.
The amount of time it takes to start streaming superbit 1080P from Netflix is shorter with a fast connection, when you fast forward or rewind, it starts playing faster as well since it buffers faster.
When you have 3 TVs in the house doing this, as we sometimes do, it becomes even nicer. A 10 megabit connection would not nearly be as nice as a 150 meg connection, in that situation.
Then you both have crappy Internet connections. It is easy to say, "what are you complaining about, it's fine" when you've never had a good connection.
However...
Once you've had one, you'll never go back...
My office has 75 down, 35 up, and I can tell the difference between that and my home which has 150 down, 65 up. Not a huge difference, but there is one.
My Mother is still with AT&T on DSL, 6 down,.768 up. Complete crap experience all the way around, but she doesn't know it because she's never used my connection.
Ugg, metered Internet... there is no future in that, the sooner ISPs drop that idea the better...
I live in Texas and have Verizon FIOS, 150 down 65 up, and it is wonderful. Works all the time, amazingly fast, low latency.
Downloading large media files or games from Steam, normally I get over 18 megabytes per second. That is faster than I can write to a lot of USB flash drives!:)
We use a lot of streaming media in our house and while 150 down isn't required for that, it sure makes the experience nice for multiple users. The 65 meg up also helps for remote VPN connections (I work from home a lot).
But it wouldn't be registered that way, it would be registered to "Capital Investment Enterprises, LLC". I would then show an insurance card with both my name (which matches my driver's licence) as well as "Capital Investment Enterprises, LLC", showing that the car is insured and that I'm an authorized driver from the insurance company (approved by the company to drive the car).
It makes the police officer happy on the side of the road, but makes it hard to put two and two together in database searches.
Really, this isn't hard, only fools get caught doing this sort of thing.
Another way to go about it is to form a non-profit and have it own everything. There are many ways to do that as well.
The illegal activity is the evasion of taxes... by using your bitcoins to buy something from a company, instead of paying taxes on capital gains on them, you are just spending the money now and getting "stuff". The shell company has to pay taxes, but companies can deduct things that the average person cannot, so you can turn it into cash without paying taxes on it.
Al Capone was an idiot, he didn't have his income laundered via a legitimate business that existed for the purpose of showing legal profits.
At some point, if you have enough money, you have to pay at least some taxes, or it begins to look funny. Al Capone didn't want to pay ANY taxes.
He went to prison for tax evasion because he didn't pay any taxes. If he had been willing to pay a bit of taxes from a legitimate company, he would probably have remained a free man.
The have cause to investigate, you've claimed a certain level of income but publically have assets which would be hard to afford at that stated level of income.
Ahh, but those assets are owned by my business, which declares millions of dollars in income, then deducts that income down to a small amount thanks to the wonderful business tax laws we have in the US.
Most of the comments in this thread are clearly written by people who have never filed a business tax return.
You're assuming that you report only $50K in personal income, yet live in a million dollar house and own a boat and a Ferrari.
What happens when you report $5M in gross income, then deduct that down to $500K thanks to deductions, then end up paying perhaps $100K in total taxes? That boat and Ferrari are paid for by the business, it isn't hard to find some business use for them, put your web site on the side and host some business parties on the boat, the Ferrari? You make client calls with it and take your business clients out for a drive in it to win business deals.
Scummy perhaps, but perfectly legal, if you cover your bases.
So you buy and sell stocks every day for a year. Any profit made is income, offset by any losses (both in the stock market as well as in the real world). Just holding stocks isn't capital gains, the increase in value is.
You're assuming the person you're using the Bitcoins with to "buy something" is someone other than yourself, a shell business created to launder the funds into clean tax free cash.
In the US, as many as 1/3 of drivers lack insurance, it sure isn't stopping them from driving around.
Germany might be more organized and put a better stop to insurance.
As for the price of the car vs. income, while that sounds nice, that would be hugely labor intensive for very little gain. What if my business leases the new car instead of buying it? It just becomes a business expensive.
My business does several million a year in revenue, I own a small company, nothing major, but even a leased Ferrari wouldn't stand out among my other major expenses.
Then you call in the forensic accountants to start following paper trails.
That is expensive and requires time and resources which are in limited supply.
Even worse, the person doing the paper trail following is likely paid a lot less than the CPA of a rich person hiding the money.
How do you think people like Bernie Madoff got away with it for so long? The people at the SEC are paid $80K a year, he pays his best people a million a year.
When the government is willing to pay for the best, they'll get the best.
If I have $50 million to hide, I can hire better accountants than the government can.
Depending on the amounts, hiding cash can be quite difficult.
Nonsense, it is plenty easy to hide, it is called money laundering. You simply need a business that is run for the purpose of showing expenses and cashflow, without actually making a profit, all the while you keep the cash. Profit and cashflow are two different things, it is not that hard to show break even while putting huge amounts of cash back.
Look at Amazon, in the past few years they have done over $100 billion in sales, yet report almost no profit (and some small losses). Yet they manage to have billions of dollars of cash in the bank.
Amazon is just doing it at a larger scale, but if you have $5 million or $50 million, the same principles apply.
^ While that is all true, and civil forfiture is a concern, keep in mind that when it is really used is when someone can't explain why they don't have a car registered in their name or why they are carrying around $10,000 in cash.
In my business, sometimes I do have large amounts of cash, but since I also have the bank receipts with me when I carry the cash, if a police officer says, "where did you get all that cash, are you a drug dealer?", I can say, "no officer, here are my bank receipts showing the deposit and withdraw of the cash from a business bank account.
The tax authority will do research, create a list of Bitcoin exchanges and than request information from each exchange about any and all Norwegian citizens that trade and about any and all trades that they have made.
Ok, fair enough... So what do you do with that information? Just trading currency between Bitcoins and another currency does not make any of it income.
What if you just move the money back and forth, every day, for a year? Each transaction is not "income". Any profit or loss is income, and probably would be reported the same way stock gains and losses are reported (since those are assets as well). But the original money is not income.
I'm not in Norway nor in the US, but here the police sometimes discovers crime (mostly illicit drug trade) by going after owners of expensive cars who cannot reasonably justify how they can afford it.
What country do you live in?
In the US, driving an expensive car is not a crime and you're innocent until proven guilty in a court of law, so the police have no right to inquire as to how you can afford an expensive car. They do have the right to check to make sure it is registered to you, assuming of course they had some other reason to stop you (you were speeding in your nice new Ferrari). But if it is registered to you and you are insured, then they'll just write you a ticket.
How and why you purchased the car is of supreme indifference to them.
Now, if you're pulled over in a nice new Ferrari and you don't have your paperwork in order (valid drivers licence, valid registration sticker, and valid insurance), then they will either write you a ticket for all that, or if they suspect funny business, they might arrest you and find out if you own the car or not or if it is stolen.
But the police aren't in the tax enforcement business, that is about 5 levels removed from their job.
Cars are registered and insured in the US at the state level, the federal government isn't party to it. Frankly, even at the state level, insurance is not filed with the state unless you have prior convictions of lacking required insurance (then you have to file a SR-22, at least in Texas).
My auto insurance is between me and my insurance company, I have a card to show a police officer if pulled over that I carry at least the minimum required coverage, but the government doesn't know how much, only that I have "enough".
As for a "wealth tax", are you serious? Blah... if it is taxed when I earn it, then you can't have another go at it, that is the whole idea of no double taxation. We fought a war of independence to rid ourselves of such nonsense. Of course, we have the death tax, which is clearly unconstitutional, but seems to be ignored anyway, so perhaps I shouldn't talk. Stupid government not following its own rules.
You need to reread the Bank Secrecy Act... It applies to cash transactions, non-cash transactions don't count unless the bank has a reason to suspect you're committing a crime.
A CTR is required for every deposit, withdrawal or exchange over $10,000 in cash. Wire transfers or transactions by check and non-cash means are not subject to the CTR filing requirement.
In addition to the above, banks can file for an exception from the CTR for a customer.
Once you get above a given amount of money in the bank, you move from the tellers to the private banking dept and receive a higher level service rep who handles things for you.
Or do you really think Bill Gates has every transaction he does reported to the IRS? I would imagine whatever bank he uses has an exemption on file for him.
Vehicles can be, but don't have to be... A business can own a vehicle...
Even if the IRS had access to the state DMV databases (Ha, they can't get healthcare.gov to work, try making 50 different DMVs talk to the IRS properly!), what would they do with all that info?
Look for people with a Rolls Royce registered who also claim to earn little money? Then what? Perhaps it was a gift from family, perhaps it was purchased with savings, perhaps the person doesn't report a lot of income because of business losses or other tax deductions?
It would be a ton of work for very little gain. Plenty of people have plenty of stuff, yet don't actually make that much money after expenses.
I own my own business, if you saw my house, then my tax return, you'd think I was cheating... but I'm not, I report every penny of gross income, then take every legal deduction that I can. The tax laws favor business owners, this is not a secret.
A 1099B is for stock transactions from a broker, I doubt one would be filed for Bitcoin. Even less likely if it is an overseas exchange.
A 1099 Misc is for paying contractors, and the requirement there is $600.
A 1099-K is required for accepting payments via credit cards, like with PayPal or a merchant account.
It is possible that at some point, major US Bitcoin exchanges might start reporting the transactions somehow, but that is just a transaction, it isn't "income" or "profit".
There is a world of difference between "income" and "exchanging currency from one form to another".
For example, if I want to convert $1,000 from US Dollars to Euros, the Euros that I receive are not "income", it is just a currency exchange.
It sounds to me like the retailer would not only be out of luck on the consoles, but would still owe people their games.
This, times 10...
In this entire thread, everyone seems to be missing that the retailer is still required to provide the actual item purchased, or they have to refund the money.
Maybe in the UK it works differently, so fair enough, but in the US, they'd still be required to ship out the actual game.
Slashdot Mirror
That attitude is very useful for employers to keep down wages, too :) I suspect that's why the system persisted, despite the rich hating it and the rest being reluctant to admit that they used it. It's a useful tool for labor unions.
Yes, but labor unions in the 21st century are evil. :)
Ok, I get why they came into existence, employers were abusive in the past, but today we have a very different legal environment and real employee protections which didn't exist back then.
Cash transfers are property transfers too, and property is an institution between society and individuals.
Ahh, it is? I'm not sure I'd agree with that. Property is private, my property is my business. Yes, we do have deeds and title to property to track ownership and resolve legal disputes, but that is between myself and the state, not society.
Maybe I'm just more individualistic than you are.
You can go down to the courthouse and see that I own my house, but you can't see how much money I make or look at my tax returns. If I really cared about the house part, that can be hidden as well, I could have a shell company purchase the house to keep my name out of it.
Our local equipment can handle gigibit today, but I believe the most they actually sell to a single home is 500 down, 200 up. Costs more than $200 a month however last time I looked. As it stands, I pay $90 a month for 150/65.
One benefit of fast downloads isn't obvious until you think about it.
The amount of time it takes to start streaming superbit 1080P from Netflix is shorter with a fast connection, when you fast forward or rewind, it starts playing faster as well since it buffers faster.
When you have 3 TVs in the house doing this, as we sometimes do, it becomes even nicer. A 10 megabit connection would not nearly be as nice as a 150 meg connection, in that situation.
In 2000 I had a 1.5meg DSL connection from SBC in Dallas, that was considered the "baseline" for DSL back then, when did someone install slower?
However...
Once you've had one, you'll never go back...
My office has 75 down, 35 up, and I can tell the difference between that and my home which has 150 down, 65 up. Not a huge difference, but there is one.
My Mother is still with AT&T on DSL, 6 down, .768 up. Complete crap experience all the way around, but she doesn't know it because she's never used my connection.
I live in Texas and have Verizon FIOS, 150 down 65 up, and it is wonderful. Works all the time, amazingly fast, low latency.
Downloading large media files or games from Steam, normally I get over 18 megabytes per second. That is faster than I can write to a lot of USB flash drives! :)
We use a lot of streaming media in our house and while 150 down isn't required for that, it sure makes the experience nice for multiple users. The 65 meg up also helps for remote VPN connections (I work from home a lot).
But it wouldn't be registered that way, it would be registered to "Capital Investment Enterprises, LLC". I would then show an insurance card with both my name (which matches my driver's licence) as well as "Capital Investment Enterprises, LLC", showing that the car is insured and that I'm an authorized driver from the insurance company (approved by the company to drive the car).
It makes the police officer happy on the side of the road, but makes it hard to put two and two together in database searches.
Really, this isn't hard, only fools get caught doing this sort of thing.
Another way to go about it is to form a non-profit and have it own everything. There are many ways to do that as well.
The illegal activity is the evasion of taxes... by using your bitcoins to buy something from a company, instead of paying taxes on capital gains on them, you are just spending the money now and getting "stuff". The shell company has to pay taxes, but companies can deduct things that the average person cannot, so you can turn it into cash without paying taxes on it.
At some point, if you have enough money, you have to pay at least some taxes, or it begins to look funny. Al Capone didn't want to pay ANY taxes.
He went to prison for tax evasion because he didn't pay any taxes. If he had been willing to pay a bit of taxes from a legitimate company, he would probably have remained a free man.
The have cause to investigate, you've claimed a certain level of income but publically have assets which would be hard to afford at that stated level of income.
Ahh, but those assets are owned by my business, which declares millions of dollars in income, then deducts that income down to a small amount thanks to the wonderful business tax laws we have in the US.
Most of the comments in this thread are clearly written by people who have never filed a business tax return.
You're assuming that you report only $50K in personal income, yet live in a million dollar house and own a boat and a Ferrari.
What happens when you report $5M in gross income, then deduct that down to $500K thanks to deductions, then end up paying perhaps $100K in total taxes? That boat and Ferrari are paid for by the business, it isn't hard to find some business use for them, put your web site on the side and host some business parties on the boat, the Ferrari? You make client calls with it and take your business clients out for a drive in it to win business deals.
Scummy perhaps, but perfectly legal, if you cover your bases.
How much I earn is no one's business.
So you buy and sell stocks every day for a year. Any profit made is income, offset by any losses (both in the stock market as well as in the real world). Just holding stocks isn't capital gains, the increase in value is.
You're assuming the person you're using the Bitcoins with to "buy something" is someone other than yourself, a shell business created to launder the funds into clean tax free cash.
Germany might be more organized and put a better stop to insurance.
As for the price of the car vs. income, while that sounds nice, that would be hugely labor intensive for very little gain. What if my business leases the new car instead of buying it? It just becomes a business expensive.
My business does several million a year in revenue, I own a small company, nothing major, but even a leased Ferrari wouldn't stand out among my other major expenses.
If a bank becomes known for ratting out its best customers, it soon won't have any of them anymore.
Since the two often don't talk to each other, it would be harder to do that here.
And frankly, if I was evading taxes, I wouldn't have a Ferrari registered in my own name.
Then you call in the forensic accountants to start following paper trails.
That is expensive and requires time and resources which are in limited supply.
Even worse, the person doing the paper trail following is likely paid a lot less than the CPA of a rich person hiding the money.
How do you think people like Bernie Madoff got away with it for so long? The people at the SEC are paid $80K a year, he pays his best people a million a year.
When the government is willing to pay for the best, they'll get the best.
If I have $50 million to hide, I can hire better accountants than the government can.
Depending on the amounts, hiding cash can be quite difficult.
Nonsense, it is plenty easy to hide, it is called money laundering. You simply need a business that is run for the purpose of showing expenses and cashflow, without actually making a profit, all the while you keep the cash. Profit and cashflow are two different things, it is not that hard to show break even while putting huge amounts of cash back.
Look at Amazon, in the past few years they have done over $100 billion in sales, yet report almost no profit (and some small losses). Yet they manage to have billions of dollars of cash in the bank.
Amazon is just doing it at a larger scale, but if you have $5 million or $50 million, the same principles apply.
In my business, sometimes I do have large amounts of cash, but since I also have the bank receipts with me when I carry the cash, if a police officer says, "where did you get all that cash, are you a drug dealer?", I can say, "no officer, here are my bank receipts showing the deposit and withdraw of the cash from a business bank account.
That solves that problem 99% of the time.
The tax authority will do research, create a list of Bitcoin exchanges and than request information from each exchange about any and all Norwegian citizens that trade and about any and all trades that they have made.
Ok, fair enough... So what do you do with that information? Just trading currency between Bitcoins and another currency does not make any of it income.
What if you just move the money back and forth, every day, for a year? Each transaction is not "income". Any profit or loss is income, and probably would be reported the same way stock gains and losses are reported (since those are assets as well). But the original money is not income.
I'm not in Norway nor in the US, but here the police sometimes discovers crime (mostly illicit drug trade) by going after owners of expensive cars who cannot reasonably justify how they can afford it.
What country do you live in?
In the US, driving an expensive car is not a crime and you're innocent until proven guilty in a court of law, so the police have no right to inquire as to how you can afford an expensive car. They do have the right to check to make sure it is registered to you, assuming of course they had some other reason to stop you (you were speeding in your nice new Ferrari). But if it is registered to you and you are insured, then they'll just write you a ticket.
How and why you purchased the car is of supreme indifference to them.
Now, if you're pulled over in a nice new Ferrari and you don't have your paperwork in order (valid drivers licence, valid registration sticker, and valid insurance), then they will either write you a ticket for all that, or if they suspect funny business, they might arrest you and find out if you own the car or not or if it is stolen.
But the police aren't in the tax enforcement business, that is about 5 levels removed from their job.
The car must be registered and insured.
I'm actually starting to like the USA again...
Cars are registered and insured in the US at the state level, the federal government isn't party to it. Frankly, even at the state level, insurance is not filed with the state unless you have prior convictions of lacking required insurance (then you have to file a SR-22, at least in Texas).
My auto insurance is between me and my insurance company, I have a card to show a police officer if pulled over that I carry at least the minimum required coverage, but the government doesn't know how much, only that I have "enough".
As for a "wealth tax", are you serious? Blah... if it is taxed when I earn it, then you can't have another go at it, that is the whole idea of no double taxation. We fought a war of independence to rid ourselves of such nonsense. Of course, we have the death tax, which is clearly unconstitutional, but seems to be ignored anyway, so perhaps I shouldn't talk. Stupid government not following its own rules.
http://www.ehow.com/about_4672449_transactions-do-banks-report-irs_.html
A CTR is required for every deposit, withdrawal or exchange over $10,000 in cash. Wire transfers or transactions by check and non-cash means are not subject to the CTR filing requirement.
In addition to the above, banks can file for an exception from the CTR for a customer.
Once you get above a given amount of money in the bank, you move from the tellers to the private banking dept and receive a higher level service rep who handles things for you.
Or do you really think Bill Gates has every transaction he does reported to the IRS? I would imagine whatever bank he uses has an exemption on file for him.
Even if the IRS had access to the state DMV databases (Ha, they can't get healthcare.gov to work, try making 50 different DMVs talk to the IRS properly!), what would they do with all that info?
Look for people with a Rolls Royce registered who also claim to earn little money? Then what? Perhaps it was a gift from family, perhaps it was purchased with savings, perhaps the person doesn't report a lot of income because of business losses or other tax deductions?
It would be a ton of work for very little gain. Plenty of people have plenty of stuff, yet don't actually make that much money after expenses.
I own my own business, if you saw my house, then my tax return, you'd think I was cheating... but I'm not, I report every penny of gross income, then take every legal deduction that I can. The tax laws favor business owners, this is not a secret.
A 1099 Misc is for paying contractors, and the requirement there is $600.
A 1099-K is required for accepting payments via credit cards, like with PayPal or a merchant account.
It is possible that at some point, major US Bitcoin exchanges might start reporting the transactions somehow, but that is just a transaction, it isn't "income" or "profit".
There is a world of difference between "income" and "exchanging currency from one form to another".
For example, if I want to convert $1,000 from US Dollars to Euros, the Euros that I receive are not "income", it is just a currency exchange.
It sounds to me like the retailer would not only be out of luck on the consoles, but would still owe people their games.
This, times 10...
In this entire thread, everyone seems to be missing that the retailer is still required to provide the actual item purchased, or they have to refund the money.
Maybe in the UK it works differently, so fair enough, but in the US, they'd still be required to ship out the actual game.