Recently, the Louisiana State Congress passed a bill that effectively bans citizens from shopping with cash for all second hand transactions (defined as garage sales, antique store, flea market, charity fundraisers, etc.)
An Internet blog raises the specter of “Big Government” wanting to see where every penny is spent, draconian “capital controls” and government dictating what you can and cannot do with your money.
I have a totally different view of this matter and also have a plan. My plan can do all of the following:
- Provide the federal, state and local government with additional cash flow
- It would severely restrict
- It would help:
Corruption
- The Illegal Drug Trade
- Illegal aliens
- Find fugitive criminals
- Enforce legal judgments
- Make the census more accurate
The Answer
This panacea to our problems is simple, effective, and technologically possible right now.
Eliminate cash from our society.
Not checks and credit cards, just good old Federal Reserve Notes and coin of the realm.
The elimination of cash would immediately tax the underground economy and add tens of billions of new tax dollars to the treasury. Further, since crime and corruption are dependent upon the secrecy of cash transactions, removal of the reward will severely curtail these illegal activities and save consumers money.
How Do We Conduct Commerce?
Substitute a national debit card system. With automated teller machine technology, immediate credit card charge and credits everywhere, we have the tools necessary to assist in the implementation. You download a certain sum and each use diminishes the value of the card. You could do it at any ATM.
- A national debit card system will be able to trace all deposits to assure the proper reporting of taxable income (do not be fooled into believing this is an invasion of privacy – look at what the credit reporting agencies are allowed to do now and they don’t even have to be accurate).
- Since checks and credit cards will still be operable, all cash flow will now be accountable.
- Since everyone would require a bank account, you would have to be careful that the banks do not create windfall profits for themselves. (Perhaps you could use some of the new tax money to pay everyone’s monthly bank service charge.)
The new system could begin by creating an amnesty period that would allow all cash to be deposited without fear of criminal reprisals. You would tax any unaccounted cash at this time and create an immediate one-time windfall.
Since the remaining cash cannot be used to purchase goods and services, it becomes worthless, thereby adding impetus to the acceptance of the amnesty. (Pay the tax or lose the money.)
People can try to go offshore with the money, but foreign banks would not accept it for fear of being stuck with a worthless commodity.
How do you think the American taxpayer will view a plan that will:
- Prevent a tax increase?
- Eliminate Crime and Drugs?
- Return a sense of morality to the country?
The concept is politically perfect and worth the effort.
Ed Note: After reading of the Louisiana law, I reminded myself of a newsletter that I wrote 22 years ago. The above are excerpts from that newsletter. For the next 2 years, I sent the letter to the highest placed politicians of both parties and never received even an acknowledgement from anyone. I guess the thought of doing without cash frightens some people.
Howard Lipset, CPA
Progressive Management, Inc.
(516) 883-2962
lipset@progressivemanage.com
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