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Re: Crypto & Taxes [WAS Re: Cybersecurity]

On Sun, 15 Oct 1995, Sandy Sandfort wrote:

> cigarettes.  Since even in the lowest tax European countries
> taxes make up 70% of the retail price of cigarettes, there is
> huge incentive to smuggle in US smokes.  Makes me proud to be
> an American.

Canada had exactly the same tax and had to eliminate it two years ago
after massive smuggling (supposedly in large part through native
reserves that straddle the border). The cigarette companies were actively
(I won't say alleged, it was definite) involved in the process, as they
exported their goods to a non-existant US market and let the packs sit
in cargo trailers to be picked up. 

Needless to say, there was no tax on exports. The previous gov had 
imposed one but had to drop it after massive cig. co lobbying alleging 
that Americans (who never even received the Canadian cigs) would switch 
to their own brands and jobs would be lost.

Cigarettes are a rather large industry and at the time were basically
operating a black market. One wonders how much easier this will become
once someone gets around to setting up a hard credible anon payment scheme.
The corporate willingness is certainly there. And I really don't see the 
securities industry (specifically currency markets) sticking around
once some competitive and sufficiently anon alternatives to the SEC go online
and offshore. Some sort of market regs enforcement is essential though,
you'll never have enough investor confidence for economically significant
blacknet exchanges otherwise.