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Wednesday, April 4, 2012

Cashless: The Coming War on Tax-Evasion and Decentralized Money

Governments have learned that when corruption and taxation reaches a certain level of plunder, folks just opt out of the system and resort to underground economies, especially in tough economic times. Governments are, therefore, gearing up to squash underground economies.
There are two major trends taking place that are shaping up as a recipe for disaster. On the one hand, we have massively indebted governments around the world desperate for tax revenues and, on the other, steadily growing multi-trillion underground economies whose main goal is to avoid paying them. According to a recent study, the amount of uncollected tax revenues in the U.S. is estimated around a whopping 500 billion dollars per year1—enough money to bailout most of Europe. At 8 percent of GDP, the underground or shadow economy in the U.S. is much smaller percentage-wise than other nations like Greece (25 percent), Italy (27 percent), or Thailand (70 percent)2, yet, given our overall size, America's untaxed economy is larger than “the official output of all but the upper crust of nations across the globe…bigger than the GDP of Turkey or Austria.”3 Question is: How long will the government allow this to last?
Read the rest here
Financial Sense