Safecoin and taxes

First I am very exited about maidsafe and the whole project. So much that I would like your input on a thought experiment:
Asume that maidsafe takes on big time. People are not only using it but there are millions of apps and content that people are paying for. Imagine that a large portion of the value created by digital services and content is safe coin based. Imagine also that more and more of the value created is digitally based as a whole. What will happen?

In a country that has a strong welfare state and also a broad consensus among the population that this is good how will that impact the “system”?
Do we have to think of a tax on transactions?
Any thoughts?

It will be just like cash I think. And for companies it will be just like getting money through a creditcard. So when a webshop get’s payed in Safecoin they will pay tax on it, just like when someone bought something using a creditcard. And when all people in a country have like $300 worth of Safecoin on their account, than they will have $300 less in cash. So after all, for the country, taxes etc. not that much will change. If farming becomes huge, like companies that have farming-rigs and are making like $300k a year, they will also pay taxes on that profit.


If you haven’t done so already, jump onto this thread at this post for some thought experiments on these lines…

With transactions being anonymous, I think the question is - how big will the black market be?

Bare in mind that globally, the black economy is estimated to be a similar size to the US economy (IIRC).

Doesn’t that count for normal cash as well? What’s the difference? If you give me $50 I have no clue in which transactions these dollars have been. No different than Safecoin.


Accounting wise, yes absolutely. No new laws needed etc.

However, I suspect many people would realise that it was easy to make substantial, even long distance, payments without declaring them.

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What will happen is what is bound to happen in all democracies: totalitarianism as the last desperate attempt to maintain the welfare state.

I think you’'re underestimating the incentive to jump the ship.
If you’re making X in France and you can make close to 2X if you run your company out of say Belize…
Many won’t think about it, but if just 10 percent of companies do this, that would be enough for budget deficits continue for another decade.
If technologies like MaidSafe and bitcoin take off, they’ll have no choice but to limit freedoms in order to save the system.


I don’t really get this one, how can Bitcoin and SAFEnet drive companies away out of a country? Let’s say SAFEnet becomes really big, like 100 milj. users, 1 billion in Safecoins going around the network. What would change? Companies like Dropbox, Boxer. MEGA, Keep2shae etc. could get their asses kicked, well that wouldn’t do much to an economy. Maybe your local supermarket allows you to pay with Safecoin or BTC. Well, no problem there as well. Now let’s say that electricity in California becomes way cheaper than here in the Netherlands. Would farmers run away from here? No, because here we have a lot of big fiber lines coming together. We all have our own strong and weak points. Will all the App-builders or website creators live in one country? I don’t think so…

@polpolrene I think that what @janitor is talking about is the choice of law/choice of incorporation.

One of the reasons why the big multi-nationals make SO much more money than local or even domestic companies is because they can choose where to incorporate their business, so that the only laws they apply to themselves are the ones they choose. The modern multi-national entity or MNE has the kind of de facto choice of law which individuals need for a decentralized society.

What the decentralizing effects of crypto technologies does is make it practically feasible for every single business to do this.

Basically, it works like this, say both @polpolrene and @ janitor owns a farm, a shipping company and a grocery.

If all three of @polpolrene’s companies are in the netherlands, then no matter what polpolrene does if he makes money he pays taxes.

If @janitor’s farm is in the netherlands, and his grocery is in the netherlands, and his shipping company is operating in the netherlands but is INCORPORATED in Belize, which @janitor can do in seconds thanks to a blockchain based incorporation system, janitor’s farm sells the food to the shipping company for just about what it takes to produce, thereby making little or no profits. In turn the grocery buys the food from the foreign shipping company for just about what it can sell the food for, also making no profits.

This is called transfer pricing and it allows ALL of @janitor’s profits to be concentrated Belize (or some other tax haven country), allowing @janitor to pay hugely less taxes than @polpolrene.

This is what the big multi-nationals do ALL the time, its a basic part of international business. But put that capability in the hands of the ordinary local business holder, and suddenly the net taxes that the Netherlands gets drop sharply.


And if you think, well that won’t apply to truly small business owners, then simply say that you have three people, the farmer, the shipper, and the grocer. They can issue each other stock in the shipping company, such the farmer gets a third of the shipper’s profits, and the grocer gets a third of the shipper’s profits.

They all continue to control their respective companies, and again, pay WAY less money in taxes.

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Ohw yeah, they do. But this is not different for crypto companies than for normal companies. A lot of companies (like the Rolling Stones, U2, Starbucks) have a little office here in Holland to pay less taxes. But even dutch companies do it, paying royalties on underwear to their holding in Luxembourg. My point is, it doesn’t really matter if SAFEnet will have 1 million user or 100 million for taxes payed in countries. Even if half of the money spent in stores was payed in Bitcoin, companies would just pay taxes like they would normally do as well.

What @kirkion said.

To your comment on about the $50:
A) you probably noticed that governments are “discouraging” the use of cash. By now in some countries you cannot legally buy anything for over $1500 using cash.
B) many services that you cannot buy for cash today you will be able to buy for SAFE tomorrow. How do you buy hosting in the EU for cash without paying VAT?
C) Would you use your money to buy 125GB or 100GB of storage space? Would you like to mine 5TB out of your 4TB HDD (which you could, if you mined without paying tax and all the other farmers paid it). No brainer questions, IMO.


Except its not. I find this stuff pure delusion. I expect a massive crack down on taxes. The story that is burning into my mind is that capitalism worked, it brought us a level of tech that could transition us to a society based on abundance and rid us if capitalism. It did that around the year 1970. And then it died and some of its inherant flaws meant that instead of going to a new system based on abundancy and liberty we have self apointed monarch trying to generate ever increasing scarcity and take us back to abject slavery enhanced by tech and based on inherited money.

While I agree we need to get past states, state based taxes are the best way to castrate and terminate this sponsored monarchy bullshit. Look at the useless media, its all full of glorifying kings, queens, vampires and zombies.

The power to tax is the power to place limits on money to vocherize it, to enforce profit efficiency on the way back to pick up to where we left off in 70 with a new system.

@kirkion, @janitor all that capital flight nonsense is also pure delusion and easy to shut down without tyrrany. Leave a market by shifting headquarters locations than pay full income tax in both places or be forced to vacate that market by injunction for a few decades and forefeit ip library in that market. Another is enforced felonies for those that try to bribe away the public interest by trying to bribe exceptions through pitting public tax bases against each other. @janitor The base emotion that people get down to with this is Id rather kill you than work for you- slavery being protracted murder. The safety net is the society.

Freedom is not about handing thugs the tools of enslavement.

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Oh noes! That would be horrible. The safecoin currency needs to be frictionless globally imo. When transactions are done with cash today, there is no tax for that in any country as far as I know. Ordinary taxes like VAT and income tax etc will of course have to be payed as usual, even with income in safecoins, but having a tax on the safecoin transactions themselves would be a nasty regulation.


Whether it is good or bad is a different topic as to whether it is likely to happen.

I suspect many more people would take cash in hand if they didn’t think they would get caugh.

Fwiw, I expect taxes to move to land taxes, which are obviously impossible to hide from. This will also vastly simplify the tax system and start to tackle the rent seekers. Therefore, I see this as a net benefit on the march towards a truly decentralised society which organises from the bottom up instead of from the top down.


They keep talking about Tobin taxes, but no country has been daft enough to try it yet.

I see digital currencies as a way to waltz right around such attempts, which makes me think it will never be successfully implemented either.

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If I run a small cozy SafeNet app I don’t even need to relocate the HQ’s, or have it in the first place.
I see crypto as a tool that allows everyone to be their own corporation, with the same privileges as only large corporations have today. And that will apply to consumers as well.
This isn’t about Apple (they already pay very little) but about Average Joe whose income is currently halved by the State.


I don’t think the “average Joe” falls within a 50% tax bracket…then again I also don’t see any connection between “Totalitarianism” and a welfare State either. :smiley:

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@tracktion As for Tobin taxes, the bar besides crypto would be selectivity, everyone else is penalized to prevent some bad actors.

I agree and what you suggest is what Pickety thinks is likely as well.

I’d like to see us do some re-homesteading with policies to get people to pay off homes and stay in paid off homes generationally. That way they can work part time, stop wasting money on interest, spread employment and help stabilize or prop wages. We also have to recognize that what we really want are higher wages, lower prices and lower profits. This low profit efficiency preference is killing us.

Income tax 25%, VAT 20%, various other taxes and schemes (such as bloated energy prices) 5%.
Maybe in reality it’s not 50%, but it’s not very far. In France the gov’t spends (part is redistributed) over 50% of their GDP, so where does it come from if not from the average person? Most folks here are bitching how companies avoid taxes and the poor don’t pay a lot either. So who else may be paying them if not Average Joe?
Look up public spending as part of GDP in the West if you’re unaware of the issue.

Ignorance is bliss.