Issue 535 Direct Taxation (the Banks) February 25, 2015

So we are all familiar with the income tax and that it is generally collected through our employers.  But when the crisis in Greece hit where they took money directly out of peoples bank accounts demonstrated that the governments of the world can take our money and the banks would not resist.  So what does this mean for the future of taxation and our money?

What I believe to be a trend:  I feel that government may stop concerning themselves with how much we earn from our jobs and instead be concerned with the total amount of money we actually have.  Reason being is that we are shifting to an all-electronic future where no other form of physical currency could really exist.  As such, governments can simply look at your bank accounts to accurately gage how much money you acquired that year and then take it out themselves.  Any deductions can be seen by simply having a program to analyze all your purchases and charitable donations and thus deduct them from the overall money that was meant to be taxed.  So in short, as you can no longer hide how much money is in your bank account, the government can just take all the money they see you have acquired based on whatever standards they see fit.  So no more accountants, filings, or any other expensive methods of tax collection, as a simple program would do the entire job for the IRS and similar tax collection bodies.  

What this means for US:  Well, we will no longer have any privacy with respect to what we buy.  The government will know how much junk food we buy, how many magazine subscriptions we have and anything embarrassing we may have bought.  In short, the government will be able to blackmail us with our purchases alone.  But this is not the worst part.

Our worst part is that all sources of money we get are now able to be taxed.  The $25 dollars we get from a birthday card, to a friend paying back a no interest loan.  All of that small stuff becomes income to the government.  A loan from the bank and even money gathered from inheritance no matter how small becomes taxable.  As such, the government will tax us on every penny we get no matter how small, because they simply can.  An all-electronic system invites this issue.  Tax havens could not even exist as the government will take the money out of any of your other accounts that are not in the tax haven, and can possibly take it out by force if you use that account to purchase a good from anywhere (yea they will hack it and take it) just to get what they think you owe.  You think the government is not that petty?  Think again.  Greece took 10% out of their own people’s bank accounts and prevented people from taking their money out to prevent that.  So as Greece as an example (a Democratic Country), we could be next.

Conclusion:  Yea, this is a worst case scenario.  But, it is a distinct possibility as we progress toward an all-electronic banking system.  There will no longer be hiding money under the bed.  So I write this for you my readers to be wary of what the future holds.