Hacking the Tax Code

The tax code isn’t software. It doesn’t run on a computer. But it’s still code. It’s a series of algorithms that takes an input—financial information for the year—and produces an output: the amount of tax owed. It’s incredibly complex code; there are a bazillion details and exceptions and special cases. It consists of government laws, rulings from the tax authorities, judicial decisions, and legal opinions.

Like computer code, the tax code has bugs. They might be mistakes in how the tax laws were written. They might be mistakes in how the tax code is interpreted, oversights in how parts of the law were conceived, or unintended omissions of some sort or another. They might arise from the exponentially huge number of ways different parts of the tax code interact.

A recent example comes from the 2017 Tax Cuts and Jobs Act. That law was drafted in both haste and secret, and quickly passed without any time for review—or even proofreading. One of the things in it was a typo that accidentally categorized military death benefits as earned income. The practical effect of that mistake is that surviving family members were hit with surprise tax bills of US$10,000 or more.

That’s a bug, but not a vulnerability. An example of a vulnerability is the “Double Irish with a Dutch Sandwich.” It arises from the interactions of tax laws in multiple countries, and it’s how companies like Google and Apple have avoided paying U.S. taxes despite being U.S. companies. Estimates are that U.S. companies avoided paying nearly US$200 billion in taxes in 2017 alone.

In the tax world, vulnerabilities are called loopholes. Exploits are called tax avoidance strategies. And there are thousands of black-hat researchers who examine every line of the tax code looking for exploitable vulnerabilities—tax attorneys and tax accountants.

Some vulnerabilities are deliberately created. Lobbyists are constantly trying to insert this or that provision into the tax code that benefits their clients financially. That same 2017 U.S. tax law included a special tax break for oil and gas investment partnerships, a special exemption that ensures that fewer than 1 in 1,000 estates will have to pay estate tax, and language specifically expanding a pass-through loophole that industry uses to incorporate companies offshore and avoid U.S. taxes. That’s not hacking the tax code. It’s hacking the processes that create them: the legislative process that creates tax law.

We know the processes to use to fix vulnerabilities in computer code. Before the code is finished, we can employ some sort of secure development processes, with automatic bug-finding tools and maybe source code audits. After the code is deployed, we might rely on vulnerability finding by the security community, perhaps bug bounties—and most of all, quick patching when vulnerabilities are discovered.

What does it mean to “patch” the tax code? Passing any tax legislation is a big deal, especially in the United States where the issue is so partisan and contentious. (That 2017 earned income tax bug for military families hasn’t yet been fixed. And that’s an easy one; everyone acknowledges it was a mistake.) We don’t have the ability to patch tax code with anywhere near the same agility that we have to patch software.

We can patch some vulnerabilities, though. The other way tax code is modified is by IRS and judicial rulings. The 2017 tax law capped income tax deductions for property taxes. This provision didn’t come into force in 2018, so someone came up with the clever hack to prepay 2018 property taxes in 2017. Just before the end of the year, the IRS ruled about when that was legal and when it wasn’t. Short answer: most of the time, it wasn’t.

There’s another option: that the vulnerability isn’t patched and isn’t explicitly approved, and slowly becomes part of the normal way of doing things. Lots of tax loopholes end up like this. Sometimes they’re even given retroactive legality by the IRS or Congress after a constituency and lobbying effort gets behind them. This process is how systems evolve. A hack subverts the intent of a system. Whatever governing system has jurisdiction either blocks the hack or allows it—or does nothing and the hack becomes the new normal.

Here’s my question: what happens when artificial intelligence and machine learning (ML) gets hold of this problem? We already have ML systems that find software vulnerabilities. What happens when you feed a ML system the entire U.S. tax code and tell it to figure out all of the ways to minimize the amount of tax owed? Or, in the case of a multinational corporation, to feed it the entire planet’s tax codes? What sort of vulnerabilities would it find? And how many? Dozens or millions?

In 2015, Volkswagen was caught cheating on emissions control tests. It didn’t forge test results; it got the cars’ computers to cheat for them. Engineers programmed the software in the car’s onboard computer to detect when the car was undergoing an emissions test. The computer then activated the car’s emissions-curbing systems, but only for the duration of the test. The result was that the cars had much better performance on the road at the cost of producing more pollution.

ML will result in lots of hacks like this. They’ll be more subtle. They’ll be even harder to discover. It’s because of the way ML systems optimize themselves, and because their specific optimizations can be impossible for us humans to understand. Their human programmers won’t even know what’s going on.

Any good ML system will naturally find and exploit hacks. This is because their only constraints are the rules of the system. If there are problems, inconsistencies, or loopholes in the rules, and if those properties lead to a “better” solution as defined by the program, then those systems will find them. The challenge is that you have to define the system’s goals completely and precisely, and that that’s impossible.

The tax code can be hacked. Financial markets regulations can be hacked. The market economy, democracy itself, and our cognitive systems can all be hacked. Tasking a ML system to find new hacks against any of these is still science fiction, but it’s not stupid science fiction. And ML will drastically change how we need to think about policy, law, and government. Now’s the time to figure out how.

This essay originally appeared in the September/October 2020 issue of IEEE Security & Privacy. I wrote it when I started writing my latest book, but never published it here.

Posted on February 10, 2023 at 6:24 AM60 Comments


AlanS February 10, 2023 7:16 AM


“The tax code isn’t software. It doesn’t run on a computer. But it’s still code. It’s a series of algorithms that takes an input—financial information for the year—and produces an output: the amount of tax owed.”

This comment and comments in earlier posts make me think that you might find reading some Wittgenstein on the difference between computer code and human language enlightening. Some discussion here: https://medium.com/the-sophist/wittgenstein-intelligence-is-never-artificial-51933315d1bd

Michael P February 10, 2023 7:26 AM

Tax loopholes are intended features, and are usually strongly sold by the tax jurisdiction to the intended beneficiaries. Calling them “vulnerabilities” is like arguing that companies competing to lower prices, and developing ornate pricing strategies to try to convince customers to use particular lock-in features, are vulnerabilities of the companies hawking their goods.

The only way to remove such misfeatures is to have a world government that imposes uniformity on all countries. I hope that’s not the ultimate goal here.

Gert-Jan February 10, 2023 7:32 AM

Interesting. A good example of a field where abuse is likely to be accelerated due to the rise of AI.

Tasking a ML system to find new hacks against any of these is still science fiction

How do you know? No one is going to tell you volunarily that they are using these tools. Same for all the people that use bots to post trash, etc.

Tax evasion is not new, but these tools potentially make it easier and cheaper. I say potentially, because if the IRS does not agree with your AI’s assessment, you could end up worse. You might even perjure, since it is always the person that submits their taxes. As I have mentioned elsewhere, it is hard to estimate the quality of any individual AI, especially with new context.

We don’t have the ability to patch tax code with anywhere near the same agility that we have to patch software.

Changing laws is indeed a slow process.

But the time to get a software bug fixed is far from uniform. It is not always as agile as you suggest.

I think software patches have two distinct steps.

Step one: create the patch. Step two: install the patch.

For step one, we’re dependent on the manufacturer / copyright holder. Step one may never be finished (or started) for a particular bug.

Step two can be a huge problem, especially when the patch cannot be applied in isolation. Often, the patch requires updating of all kinds of dependencies, bringing along dependency hell. And that’s assuming the patch is offered for free and doesn’t require the client to purchase a newer version of the software product.

I think in both software and law, a cost/benefit tradeoff pushes to get the biggest problems addressed and fixed.

Winter February 10, 2023 7:43 AM

@Michael P

Calling them “vulnerabilities” is like arguing that companies competing to lower prices, and developing ornate pricing strategies to try to convince customers to use particular lock-in features, are vulnerabilities of the companies hawking their goods.

A large part of marketing can be seen as hacking consumers to spend more money than needed. It is not different from hacking the IT system of banks and companies to extract money when they do not want to pay it.

An example, putting sweets and snacks at the checkout that make children beg for it at points where parents cannot handle them because they are busy is just hacking consumers.

Petre Peter February 10, 2023 8:48 AM

I am not trying to explain taxes but why do they have to be so complex? Isn’t complexity itself a type of vulnerability? It certainly is for security. If a machine which runs on code no one can understand will dictate what we owe in taxes, then what hope is there for improvement? We cannot believe in free will and agree with confusion at the same time. If I don’t understand something, how can I possibly claim to agree with it. Consent of the governed to an unpredictable machine in the sky is tyranny. Taxes should be taught in schools if they are that complex.

Brenden Walker February 10, 2023 10:00 AM

@Petre Peter – IMO you are spot on. However the people who make the laws are controlled by the people who have the most to gain by a complex and easily exploited tax system. Fixing this would require fixing the underlying system..

Winter February 10, 2023 10:29 AM

Tax evasion is easy if you are rich.

Put your money in a tax exempt trust (causes are many). The trust “invests” in assets or “donates” money to causes.

You live unregistered in mansions owned indirectly by the trust. Mansions that have paid staff for maintenance, leased cars for company use etc., all at your disposal, but you yourself are never registered. You use company cards, but your name does not appear, these are all booked as “expenses” of some departments.

If you want something, the trust delivers it, e.g., from a foreign address. Your name never ever appears anywhere.

Obviously, you need good accounts to keep all declared costs legally tax free, but a lot can be done this way.

See, eg, the current Trump Organization tax scandal

Winter February 10, 2023 10:52 AM

re: tax evasion using trusts

If you would like to see some of the structure, look here:
Trusts as Vehicles for Tax Evasion and Tax Avoidance: a Critical Study



There is obviously much, much more to find on this topic.

Nicholas Felker February 10, 2023 11:07 AM

I think ML could be beneficial for taxes then, as right now only a fraction of the public is able to full take advantage of tax benefits and deductions. If that opportunity was opened up to the general public at least it’d be more fair.

Yeah a lot of loopholes and errors should be corrected. Partisanship is a terrible thing. But perhaps the next time there’s enough political interest in tax reform, ML systems can be employed to identify vulnerabilities ahead of time.

yet another bruce February 10, 2023 11:48 AM

Maybe the Congressional Budget Office needs to employ a Red Team of adversarial accountants armed with guile and the best ML tools available when they estimate the fiscal impact of new legislation.

Raising revenue can be and should be pretty straightforward. A simpler tax regime presents a smaller attack surface and should be more secure. Establishing a political coalition to support new spending programs is difficult and becoming more so. One way to grow the coalition is to fund programs through the tax code. For example, tax incentives to encourage low-cost housing can be easier to pass than spending programs to build low-cost housing. And so we end up with the sprawling mess that is the tax code.

Bradford February 10, 2023 11:52 AM

The tax code isn’t software. It doesn’t run on a computer.

In France, income tax is computed from taxpayers’ individual returns, using an algorithm that is authored, designed and maintained by the French Public Finances Directorate (DGFiP). This algorithm relies on a legacy custom language and compiler originally designed in 1990, which unlike French wine, did not age well with time. Owing to the shortcomings of the input language and the technical limitations of the compiler, the algorithm is proving harder and harder to maintain, relying on ad-hoc behaviors and workarounds to implement the most recent changes in tax law. Competence loss and aging code also mean that the system does not benefit from any modern compiler techniques that would increase confidence in the implementation. We overhaul this infrastructure and present Mlang, an open-source compiler toolchain whose goal is to replace the existing infrastructure. Mlang is based on a reverse-engineered formalization of the DGFiP’s system, and has been thoroughly validated against the private DGFiP test suite. As such, Mlang has a formal semantics; eliminates previous handwritten workarounds in C; compiles to modern languages (Python); and enables a variety of instrumentations, providing deep insights about the essence of French income tax computation. The DGFiP is now officially transitioning to Mlang for their production system.”

If anyone wants to test their tax-hacking AIs, that might be a good place to start.

Winter February 10, 2023 11:59 AM


Yeah a lot of loopholes and errors should be corrected. Partisanship is a terrible thing.

“Legalized corruption” would be a better name. Inheritance, and other, taxes in the USA for the very rich political donors are virtually abolished. This can be easily seen in the exploding wealth of the rich USA families Walton, Mars, Koch etc.

Paul T February 10, 2023 12:02 PM

I’d like to feed the COBRA, Medicare and Social Security rules into the same AI and have it give me some direction. I’m in waaaaaay over my head.

Anonymous February 10, 2023 12:10 PM

Some vulnerabilities are deliberately created. Lobbyists are constantly trying to insert this or that provision into the tax code that benefits their clients financially. That same 2017 U.S. tax law included a special tax break for oil and gas investment partnerships, a special exemption that ensures that fewer than 1 in 1,000 estates will have to pay estate tax, and language specifically expanding a pass-through loophole that industry uses to incorporate companies offshore and avoid U.S. taxes. That’s not hacking the tax code. It’s hacking the processes that create them: the legislative process that creates tax law.”

Would this be best characterized as a ‘supply side attack’?

Phillip February 10, 2023 12:11 PM

About complexity (some discussion in this forum), it is worth noting how several efforts to improve written systems requirements had evolved (during an earlier stint within industry) to include object-oriented analysis and modeling tools. Obviously, some government contracts involve real money. A more important purpose is avoidance of surprises, because we are well into the system-of-systems era. That is, while money may or may not readily flow into contracts, surprises with actual deliverables are severely “not needed.” A language lawyer? Yes, requirements folks must get theorizing straightened out before the ink is dry.

JonKnowsNothing February 10, 2023 12:39 PM

@Petre Peter, All

re: Tax complexity

The purpose of taxes, fees, charges etc is to remove money-funds from one group to give to another group.

Historically there are several categories where such funds are spent:

  • Royal Housekeeping: Palaces, Feasts, Servants, Entertainment(Hunting, Plays)
  • Military: Soldiers or Mercenaries
  • War Equipment: Cannon, Horses, Siege Machines

The whole historical structure was how to get funds from those who could not say No, to those who wanted the funds and said Yes You Will (if you want to live).

So the scheme is tiered in a way that the higher up the food chain you are, the less you have to provide out of your own pocket, as long as you pass along most of the funds from those below you who cannot say No. A built in, self reinforcing system.

As things progress, complexity comes along to provide less direct burden to those “In Favor” at that moment. All sorts of schemes evolve granting exemptions, reductions, monopolies, letters of patent, that work as long as those “in favor” deliver the goods of direct increased revenues to the head of state.

Everything has to funnel funds to the head of state. If it doesn’t there’s going to be a problem or war or crackdown (see Black Market, Cash Economy).

Modern complexity can be seen in the USA Real Estate Market. This is an artificial market propped up by the USA Tax Code. It’s a simple ponzi scheme but nearly everyone in the USA has bought into the scheme and can hardly believe it’s a scam. It’s a very good one.


A single family home is given a number of tax credits or benefits that renters or homeless do not have. They get to deduct the cost of financing (Banks) from their earnings (Work). They pay interest to the financial industry (Bank Income). They pay property taxes (Local Government Income). They pay about 20 other categories of fees (various local taxes and districts).

The USA Real Estate Market depends on Churn: constant turn over of housing. Each time a house changes hands, there are sales taxes (Short Term Funds vs Long Term Holding, aka Money Today vs Money 30 years from now). The Agencies that assist the transfer make thousands of dollars on each transaction (Corporate Income, Worker Income) .

If people buy and hold for 30 years, they have no financial charges after that, the RE Market dries up (no trade overs). Local governments may get less money:

  • ex: Property Tax in California is based on Purchase Price. So if you paid $200,000 for your home 30 years ago, your property tax will be less than someone buying the same home today for $500,000 (inflation).

So the tax code is set to encourage people to Buy and Sell their homes. It funds governments and multiple industries.

Each time a dollar changes hands it is taxed. The velocity of money funds the USA.

  • Your money Out-go is someone else’s In-come.
  • All In-come is taxed
  • Every time a dollar changes hands, it is In-come to the next person
  • More Out-goes means more In-comes and more Tax Revenues

Also note:

  • If you buy a house and finance it, you do not really own the house. The Bank owns the house. What you have is a 360 month rental agreement at some agreed upon rate of interest.

Clemens February 10, 2023 12:43 PM

Interesting take that makes me wonder if states might be able to develop some type of “fuzzing” process to identify tax vulnerabilities.
One EU-centric. algorithmic tax exploit well worth reviewing is the „CumEx“ scandal successfully claiming $63B in duplicate refunds: https://en.m.wikipedia.org/wiki/CumEx-Files

JonKnowsNothing February 10, 2023 1:12 PM

@Paul T, All

re: COBRA payments

If you are dealing with COBRA, then it may be assumed that you have lost your Employer Paid Health Care.

COBRA costs are astronomic because the Medical Insurance Industry is setup to spread Costs v Risks v Income across a Very Large Number of people and as a solo person you have to assume ALL the risks on yourself and your family.

COBRA is also temporary and limited in duration. In theory, the idea is to have some insurance while you hunt up either new employment with employer funded health care or opt into some private health care insurance. Some insurances require Proof of Continuous Care or you are subject to Catastrophic Condition Exclusions.

Medicare (USA) is Medical Health Care funded through Social Security. It is currently available to those 65+ (1) or disabled. It is not available to 45yo 50yo etc.

Social Security is an INSURANCE program. The US drops this last part but it is important. It is NOT an entitlement, largess, hand out or charity. It is an INSURANCE program like any other insurance program. You pay in during your working career, theoretically when the cost of the premium is absorbed by your income. When the policy matures at 65+yo you can claim the benefits. The benefits do change over time like all policies can change, some are added on and some maybe reduced. The overall plan remains the same.

If you are younger than 65+ and not disabled you cannot access Social Security or Medicare.

For those who are destitute, there is another program Medicaid that mirrors Social Security and Medicare but is not restricted by age. It is restricted by income and assets aka Means Testing. You have to fall into the Federal Poverty Guidelines to be eligible. These programs are administered though the County System where you live. Benefits vary by State and County, the local name of the program can vary. Some are less generous than others. Some programs may allow a multiplier to the base level eg 2x 3x 4x.

2023 Values are:

‘Persons Annual Income
‘ 1 $14,580
‘ 2 $19,720
‘ 3 $24,860


1) There is a stipulation that in some cases you can claim reduced benefits at 63+yo.

Winter February 10, 2023 2:45 PM


The purpose of taxes, fees, charges etc is to remove money-funds from one group to give to another group.

The situation is more complex than this sound-bite makes you believe.

Historically, governments spend some 5% of GDP, or less. Generally, the relevant bodies of the state, royals, church, gentry, had their own domains that financed them.

Only after industrialization did tax rates started to increase to ~15% of GDP. Which allowed Europeans to overrun the rest of the world.

Nowadays, you have European countries with ~40%, down to ~30% Canada, UK, USA, Japan, to ~20% Russia, India and China. Tax rate does not tell the whole story. Some countries do thing outside taxes, others waste taxes for private gains. But in general, it does tell you what to expect.

There is a relation between tax revenus and quality of infrastructure, education, and welfare in industrialized countries. The higher the tax rates, the less poverty.

lurker February 10, 2023 2:46 PM

@Petre Peter, Brenden Walker

Amen brothers. Tax simplification is easy for you or I. It is hard for governments because on their backs they have an army of potentially unemployed lawyers and accountants.

JonKnowsNothing February 10, 2023 7:21 PM

@Winter, All

re: The higher the tax rates, the less poverty.

That is not always the case. It is only true if a higher amount of spending goes into areas called “social service programs”.

Something has to get less funding. No one likes less money. Oligarchs like it even less, hence their continuous agitating for means and methods to avoid it.

The USA has the highest cost of medical care globally, yet we have the worst outcomes and fall far down the lists. We import large numbers of top medical personnel and staff from other countries. Harvesting those professions from countries that have generous Tuition Funding for Medical Studies. The USA Medical Profession and Universities would no more lower their costs for Medical Tuition, so that more people in the USA could study medicine, than fly.

High costs, means everyone along the chain gets paid. Whether it’s by personal fees and taxes or by Federal and State Spending, someone is paying the piper. Yet we have poor results for our funds.

There are countries where The Social Good is considered important. Americans choke on the word Social. It ain’t happening here.

We can see the collapse of Education in the USA crumbling in real time. There is a lot of money from private and public funding going into the system. There is not much coming out. Even getting advanced degrees does not prevent people from falling into poverty and many are so burdened by the costs that they can never pay it off in their life time.

Part of the problem is in the tax structure and part of the problem is in our disdain for the word “Social”. Another part is a universal myopia in recognizing the True Costs of Education.

The USA has their own methods of funding all levels of education but not so long ago, education was paid for by a community with 1 teacher in a 1 room school house with all grades in 1 room, a wood burning stove for heat, no cafeteria, no gymnasium and no football.

Governments and Corporations complain there will not be enough persons, not enough educated persons, not enough skilled persons, to pay the taxes, fees and levies in the near future.

It’s going to be a bumpy ride.


iirc(badly) A recent MSM article about the break up and arrest of some Nursing Staff in the USA who purchased their degrees from a Nursing School Diploma Mill. They had not done the official course work nor taken all the myriad tests and exams to qualify.

What was interesting is that nearly 40% of these people were doing a Good Job. They were not messing up, not doing anything wrong or incorrect. It was not until they were traced from the Diploma Mill that things got testy.

Zho, Consider:

  • Why could these 40% NOT get into a proper medical school and or get the proper training and proper certification?

There are at least 2 reason:

  • Costs
  • Supply Choke Point

Doug February 10, 2023 8:15 PM

Perfect example of complexity being the enemy of security. For the tax code, it’s a simple fix: flat tax rate in all income above poverty. No deductions, exemptions, or differential rates for different kinds of income. If there’s no nuances, there’s no hacks.

Same is true in ml systems. It’s a lot more robust to make one that focuses on a single task and does it well than to try to create a general purpose AI. For something like chatgpt, there’s unacknowledged and undisclosed bias in simply what sources were chosen to be scanned. If it’s an ever evolving corpus, and the sources become known, then those sources can be hacked for a corpus poising attack. At least with traditional keyword search, you know the sources and can make judgements of trust. With an obfuscated ml system you can’t.

tim February 10, 2023 8:38 PM

it’s a simple fix: flat tax rate in all income above poverty

Congratulations – you just cut taxes for the wealthy and increased taxes on the lower and middle classes.

But I’m sure you’re fine with that. Most of us aren’t.

lurker February 10, 2023 10:06 PM

@Doug, @tim,
re flat tax rate:

also my dream, but not just on income. When money moves, tax it, no ifs, no buts, no exemptions, no allowances. If you can capture every transaction whatever (and the pallets of banknotes economy is not significant), then the rate should be so low that even charities would be willing to pay, and oligarchs would find it uneconomic to evade.

A flat tax would be fair, everybody has the same rate, and the more money they earn or spend, the more tax they pay.

Clive Robinson February 11, 2023 2:34 AM

@ tim,

Re : Flat tax rate.

“Congratulations – you just cut taxes for the wealthy and increased taxes on the lower and middle classes.”

You are making the usual mistake most US citizens are brainwashed into making.

Which is the assumption the massive massive costs of running non flat rate sysyems will remain.

Back in the Victorian Era the Penny Postal Rate was introduced because it was realised that employing people to weigh letters and work out distance was a massive waste of money and so expensive it would effectively stop a national postal service being formed.

As I’ve noted before ecconomists tend to hide the “distance cost metric” from people not just because it makes a nonsense of many of their Free Market mantras but to hide the fact that a very very very substantial part of the population os employed in “make work” that has no value.

Such nonsense “makework” and it’s massive costs is what pays much of your,

“lower and middle classes”

So the “Social” the US are ludicriously taught to hate so much is alive and well being used as a method of oppression and to stop you realising just how much you are being exploited…

The US middle class is the National “Pump Sump” used as a method of making the harsh realities of the “might is right” harms inflicted on society by psychopaths less directly attributable.

The problem is only around 10% of the US population actually does “productive work” and that number is steadily decreasing, whilst worse the population is growing.

The only logical outcomes of this under the way “The American Dream” works are,

1, Vastly increased poverty and increasingly falling average age of death.
2, Vastly increased middle class makework systems that are the default social support system, that fail because they are so badly imbalanced.

Both are very bad for US citizens, and can only result in significant harms, social unrest and exploitation of “defined classes” as seen by certain sociopaths at the top of of the heap.

Why are the middle class the “pump sump” well they are there to even the flow of pain to the system and try to prevent the inevitable catastrophic failure that “Yhe American Dream” is driving to like a train about to hit the switch…

Sadly the problem is to see this clearly you have to be outside of the system looking in or down on it, not part of it fighting for the scraps you are allowed, so others you have little or no idea exist can vastly profit by your pain and hurt.

Winter February 11, 2023 3:24 AM


That is not always the case. It is only true if a higher amount of spending goes into areas called “social service programs”.

Gini coefficient. Taxes are what pays for public goods. That is infrastructure, education and health, as well as rule of law and security. Higher taxes means more public goods.

Social services are nothing but an insurance against bad luck. Including the type of bad luck John Rawls talks about. Which are a type of public good.

JonKnowsNothing February 11, 2023 3:34 AM

@Clive, All

re: massive costs of running non flat rate systems will remain

They remain, because people remain. If you dump so called less productive workers, they don’t just evaporate like turning off a light switch.

There are millions of workers around the globe struggling to get food day to day, hour to hour. There is no shortage of workers. They sort garbage, sort rocks, pick up poop, and do untold amounts of back breaking mind numbing work. They might even be Moderators working to block the filth that flows across the internet. Spending hours looking a images of depravity such that only humans can invent. More of such work is coming to the Wealthy Economies and is known as The Gig Economy or Out Sourced Work.

A small contribution from my life:

  • I have a decent education. I struggled for more than 10 years to get it.
  • I had good jobs for the times. I made decent money. More than decent far better than poverty wage.
  • With my spouse, we had excellent income. Both high earners. Both highly educated.
  • We did what most brainwashed US citizens do: bought, sold, invested, saved and increased our money pool.
  • When my spouse died I lost 50% of the household income. I am now below poverty level. I struggle to pay some bills, I cannot pay them all. I pay the rent. I go to food banks. I dropped Pride and Shame in trashcan and get on with the business of getting by.

Now here’s something to consider:

Had I been able to keep that 50% income, I would have to be prudent but I would be able to pay the bills, buy food at shops, buy clothes and necessities as needed.

The government traded $2,000/month of retirement funds and replaced them with $2,000 of funds from Other Sources: Charities, Poverty Programs, Medical Programs for the Destitute.

Which option do you think would really cost less?

There are millions like me. I see them standing in the lines for a bag of groceries.

There is a presumption that “a massive waste of money”, is replaced by something that “is not a waste of money”. The problem remains you shift the shyte from one shoe to the other.

I get a bit annoyed when someone tells me I am a waste of money….

Winter February 11, 2023 4:22 AM

Re: Flat tax rate

This goes back to the basic question of what to tax?

Income, Kapital or Kapital gains? And at what relative rate?

If ROI > GDP growth (wage growth), all assets end up in the hands of a few (this was the case before WWI).

If ROI < GDP growth, inflation eats away all assets.

Tax decisions are never simple as every decision will change society to its roots.

Winter February 11, 2023 5:00 AM


I get a bit annoyed when someone tells me I am a waste of money….

I am sorry to hear of your plight. It always hurts to hear such stories.

That is what money does to people, it valuates them on a on a linear scale from low to high value. But this monetary value is always a monetary value to others. And those on the low end eventually come out as having “negative” monetary value. You can easily see this in every discussion about pensions. Retirees are “a waste of money” in this view.

This monetary view makes every person a tool for someone’s profit. And it was the policy of Romania under Ceaușescu, the USSR under Stalin, and the USA under the Republicans.

The other approach to money is to give everyone a basic income. You value every life, but allow those who want to increase their monetary value and income.

Every experiment with basic income has been a resounding success. But every religion rather has everyone die than allow it.

Winter February 11, 2023 5:33 AM


to hide the fact that a very very very substantial part of the population os employed in “make work” that has no value.

That is generally overstated. The USA and, eg, Japan indeed have bogus employment as social services that does not enter the tax revenues (the USA also uses jails as social security of the “unemployables”).

However, a lot of what is called bogus jobs is actually just overhead to organize the whole chain. Some marketing is, eg, waste, but much is needed to get goods at consumers.

JonKnowsNothing February 11, 2023 9:58 AM

@Winter, All

re: Basic Income

There are communities and cities in the USA that are implementing a Basic Income program. So far they have been terrific successes.

Most of the programs are in small to medium size cities which are more agile in their structure. Larger cities get bogged down in bureaucracy.

Much of the USA is stuck in “means testing” of “which are the deserving poor”. This is a favorite political game globally. Basic Income by-passes this game to a large extent.

The USA programs run something similar to this:

  • Each person is given an additional $500-$1,000/month. There are no restrictions on use and it does not have to be paid back.

Some cities give out more funds and some have larger pools of people receiving the funds.

The findings are that the funds are used in the community. They buy food, clothing, goods and services in the community. The increase in household income reduces debt costs (credit cards etc) and provides a platform where people are able to shift occupations to those that they earn more money annually. They can take advantage of education options, get college degrees and qualification certificates.

Debt relief programs, School Debt Relief and Medical Debt Relief programs are separate, mostly funded by private groups, and whip-rounds called a Jubilee. Once people are out of catastrophic debt their lives improve since less funds flow into Debt Collections and more flows into normal household uses.

Currently, in the USA, there is a proposal for Debt Forgiveness for specific type of Tuition Debt accrued by for-profit promoters of fake universities. These groups flourished under Betsy DeVos (2017-2021). DeVos allowed Federal Loan Guarantees to be used by these fraudulent promoters with the understanding that unlike other loans, they cannot be “forgiven”. They are and remain forever debt.

However the legal justification for write-off, was made using COVID-19 Mandates. As these mandates are ending, so does the ability for the US Government to write off the loans.

The case has been brought to SCOTUS.

Bradford February 11, 2023 10:41 AM

As it turns out, the French tax code being released as software is a relatively recent thing, and perhaps not as unique as it seems. It happened because a Free Software Group (April) sued the government tax agency to get access to the code, after it rejected a 2014 Freedom of Information request, and the agency lost. That page has a link to the judgement and a “HowTo” guide on requesting government source, all in French of course.

The French tax agency had developed the calculation software for its private use in the 1990s, during which time probably all major tax agencies had done the same. The USA and each of its states have Freedom of Information laws too, and while they may not have the same level of software tax automation found in Europe, I guarantee they’re running any submitted numbers through at least some automated checks. One could therefore probably get a pretty complete set of computer rules for “normal” personal and corporate taxes under FOIA, though they may not encode every loophole the rich use.

lurker February 11, 2023 12:32 PM

@Winter: what to tax?

Tax the use of money. When money changes hands, tax it.

Money at rest has only artistic value. Capital gains are only gained when they are realised. Taxes on income breed an entire industry devoted to concealing income, or divesting it in ways still profitable to that earner/taxpayer.

In modern Western economies very few transactions do not pass through some form of accounting system. Fears of an underground cash economy arising to avoid a universal flat tax are overstated. The simplicity and low rate should appeal to all.

“Tax decisions are never simple as every decision will change society to its roots.”

Indeed, the greatest problem with a flat tax will be how to employ to the benefit of society all those currently employed in the tax industry.

Winter February 11, 2023 12:52 PM


Tax the use of money. When money changes hands, tax it.

That is called VAT, or direct taxes, it taxes poor people more than rich people.

Furthermore, I do not want your money for my services, lend me your car, house, etc. Pay me in goods, in kind, go back to a barter economy. Again, the CEO or company owner does not have to pay taxes as his employer/company will supply everything in kind. Stuff obtained by bartering with other companies. It is those at the bottom who will have to pay the bill

Taxes are never simple.

Winter February 11, 2023 12:57 PM


The simplicity and low rate should appeal to all.

If people can avoid paying a cost, however small, many, or even most, will not pay the cost.

Winter February 11, 2023 1:02 PM


re: Basic Income

There are communities and cities in the USA that are implementing a Basic Income program. So far they have been terrific successes.

More Americans oppose than favor the government providing a universal basic income for all adult citizens

The idea of the government providing a universal basic income for all adult citizens draws broad and intense opposition among Republicans, but is generally supported by Democrats, according to a new Pew Research Center survey.

JonKnowsNothing February 11, 2023 2:40 PM


re: Basic Income: intense opposition among Republicans

Such ideas often fall upon deaf ears, blind eyes and adherence to dogmas. Folks that align towards the “This is Mine! ALL Mine!” view can change their views once they see the “balance sheet” on the outcomes of these programs.

One reason it works in smaller cities and towns, is that it is much easier to see the benefits than in a large mega-metropolis. Smaller towns, notice the increase in local purchasing, decrease in negative social behavior, increases in direct city benefits aka local tax revenues (property taxes, sales taxes). Reduced spending needs on other intervention programs.

Even the Republican-Libertarian types will sign on.

The Global Economy is starting to see a fracture in the Unpaid & Unaccounted Work Sector. Unpaid Labor has been taken for granted for a long time, but now things are beginning to shake with the reduction of Paid Work and the increased work loads in Unpaid Work.

It isn’t just one sector, High Tech is known for sleeping under your desk, working 7d, on call 24×7 and the pay off is a microwave hot dog with a bag of chips in the break room.

lurker February 11, 2023 2:51 PM


Citizen A earns $10,000 p.a. and spends $10,000. Assume flat tax rate 2%, tax paid by A is $200; and tax paid by those he spends with is $200.

Citizen B earns $100,000 p.a. and spends $10,000. Tax paid by B is $2000, and by his creditors $200. If B spends more his creditors pay more tax. Note that under the “no ifs, no buts” rule all the trusts and charities established by B for tax avoidance will also pay the same flat tax.

This “taxes poor people more than rich people” only if viewed as a percentage of individual income, and only if B sits on an increasing pile of idle cash, but even this will be taxed from his estate on death.

When viewed as pennies in the hand the rich will obviously pay more tax, some of them more than they have ever paid.

The point about a flat tax in the context of this thread is it should be unhackable.

Clive Robinson February 11, 2023 3:23 PM

@ JonKnowsNothing,

Hmm my reply to you appears to have disapeared.

I in no way implied the people doing “makework” were not productive or should be dumped.

But as I’ve pointed out in the past that the “Protestant Work Ethic” is a con designed to subjucate the masses and pay them little or no value for their labour so the predecessors of the neo-cons could vastly profit.

The excuse back then was a classic “think of the children” knee jerk nonsense based on “drunken mothers droping babies over the sides of steps”. Those administering charity were basically evil when seen on mass (look at Irish and Scottish Potato famines and “work houses” and less than a hundred years ago “labour camps”).

But as a society we have three basic problems,

1, Humans are physically weak.
2, Automation is increasingly using “force multipliers” to replace humans.
3, The human population is still rising.

Thus the “available work” is falling rather quickly whilst the population is increasing.

Or more simply,

“There is nowhere near enough traditional jobs to go around”.

And the problem is going to get worse a lot lot worse before it gets better.

But it’s not just traditional jobs, it’s those you could call cerebral where with the best will in the world the person can only do a couple of prductive hours a day, thus due to that religious mantra nonsense feel obliged to actually “makework” themselves.

If you examine the tax system it is deliberately oppressive and focussed against those at the bottom of the socio-economic ladder. For some the lack of jobs is a way to manipulate society to their own psychotic views of how society should be. Frequently this is bassed or excused on psudo religious race grounds. Which is obviously not good for society as a whole.

Many countries have “tax alowances” on the first few thousand earned thus superficially it looke like it corrects the socio-economic issue. The problem is that it can only be earned by direct employment, thus alow those of a psychotic viewpoint to decide who does and doew not receive the “tax alowance”.

If instead everybody payed a flat rate of tax on all earned and unearned income as well as any growth in capital or company growth at say 30% then it woyld go some way to being a more equitable system.

Then if everyone was given a “basic income” equivalent to or better than the tax alowances the need for menns tested and similar benifits would diminish or go. But also so would the extraordinary costs of those performing the meqns testing, often with clear bias present.

But at the end of the day many people do want to work but not for the employers they currently have to endure. Such employers would have to change to meet new conditions more equitable to the employees not the often rouge employer.

With a basic income they could more easily become self-employed and thus be more responsable for their direction. But even those employed could knowing they have a basic income plan and activaye a seperation between them and a rouge employer.

One aspect of this is reduced working hourse of naybe a two or three day week.

The fact is even those on the lowest rungs of the socio-economic plan would be able to plan their way upwards and outwards.

As for the

“Work every hour god gives for the good of your soul”

It takes little brains to see how that’s been exploited down the years often violently so. The idiots that act as the enforcers often fail to realise it is their own future they are destroying.

So please do not think I even remotely assumed harm would come to those doing makework, there are very clearly alternatives. Which have been tried and found more preferential than the current neo-con matra nonsense.

modem phonemes February 11, 2023 4:50 PM

The principle of taxation is primarily a “salary” the government is due for its main function which is ensuring common or public order. Common order includes defense, criminal and civil justice and enforcement, and public necessities such as transportation infrastructure.

If the government exacts undue taxes or fails to provide the public goods for which taxes are taken, it acts unjustly. Governo ladro.

On what principle is taxation to support a basic income ? Without some qualification or limiting principle, tax to provide basic income amounts to arbitrary redistribution of the goods of the society, i.e. theft by the state. It is also implicitly totalitarian. If pursued to its inherent logical extreme, which it will be since there is no limiting factor, it makes everyone a slave of the state.

Some kind of analysis is needed to find a just way to provide for the extremes of poverty. As a starting point for consideration one could take perhaps the law in the Old Testament which required leaving a certain part of the harvest for the poor.

MarkH February 12, 2023 12:30 AM


“I am a waste of money”

Gott im Himmel!

If people learned only one thing from the past 100 years of history, I hope it would be the centrality of safeguarding the value and dignity of every person.

I suppose that commitment to this notion motivates Bruce in his quest to help people obtain better privacy and security, as it motivates countless good people in every land.

Who calls another a waste of money, has lost hold of ground truth.

Winter February 12, 2023 3:17 AM


The principle of taxation is primarily a “salary” the government is due for its main function which is ensuring common or public order.

Anyone who thinks his government is an employee of him has not understood it.

If we must use a metaphor, it is more useful to see taxation as a membership fee due for accessing the premises and participate in the club.

But as the nation state is the organising principle of 99% of humans, any metaphor is woefully inadequate.

In short, taxation is what allows you to be part of your community and society. And it is not you who decides what taxes you are due, that is your community, where you might have a say in the matter, or not. And if you do not like it, you can pack your belongings and leave.

Reality is harsh and unforgiven.

modem phonemes February 12, 2023 3:57 AM

@ Winter

is not you who decides what taxes you are due, that is your community

What principles does the community use to justify taxes ?

Clive Robinson February 12, 2023 4:44 AM

@ ALL,

As I’ve noted religion is behind “makework” it is seen by some as the solution to,

“The Devil ‘makes work’ for idle hands”

The thing is the “devil” does not exist, and never did though “evil” does. But evil is an oppinion by an observer as seen through their perception of “good or bad” as broadly described by the mores, morals and ethics of the society they live in. Which are always in a state of flux.

Laws be they religious or societal are always inflexible such that a clear defence established and judgement be made. We then and only then come to the question of justice. The woman who having suffered years of abuse at the hands of a violent drunkard husband finally takes action and kills him, can arguably be said to have defended herself against future harm and potential loss of her own life. Is she doing good or bad? It is when all is said and done actually a matter of perspective. How society then proceeds against her in terms of judgment is a mark of how mature a society is, and how far it has moved from the primal beast of tribalism that demands blood sacrafices and underpins so many religions. We call it “mob rule” and “vigilante justice” but in reality it is the beast of tribalism being saited.

Some pervert that beast for their own advantage, they usually suffer from one of the dark so far incurable mental defects of personality that society actually finds abhorrent, that is narcissism, sadism, psychopathic, Machiavellism, etc (the list actually grows as a society matures).

We know from observing nature, that the herd will willingly sacrifice the old and infirm to preditors, or just leave them behind. The argument is,

“For the good of the many, the few must be sacrificed”

And we see it in any collection of ebtities with agency. For instance in Spain in the early part of C19 the shortage of resperators ment “triage” and all that word covers up. The psychological damage to ordinary people that C19 caused and the fact so many will not return to the work patterns demanded by those who exploited them in the past is now causing a major undetcurrent in society that will get a lot worse before it gets better because of those that exploited will fight tooth and claw to retain their unwarranted position by the use of “guard labour” be they the sadists we have recently seen at work in law enforcment or the narcissistic puppets prevelant in politicians, legislators and judiciary.

These are the people for whom the “etetnal vigilance” warning was made.

Supprisingly for many 1980’s UK Britain actually had a form of “basic income” and it worked and this scared those who profited by oppression via work.

It was called “unemployment benifit”, it enabled people a dignified level of existance sufficiently above the poverty line that it gave them freedom from the oppression via work.

Because those that control the media and politicians are those who benifit most by “oppression by work” you don’t get a balanced view point of what happened.

All that supposed growth by “free market” principles was a compleate nonsense. The growth was actually caused by those on unemployment benifit having time to experiment and thus “find their vocation” and setup small businesses or develop their creative skills.

I was lucky in that my interests and areas of experimentation were in a leading edge technology where the laws of “supply and demand” ment the “oppression by work” rules were too weak to have any effect. If I found an enployer being unreasonable or rouge I simply walked into another job usually at much higher renumeration (that I neither needed or wanted).

Several friends became “trades people” and are now small business owners, and have employees that value the fact that as employers my friends have a different perspective to the many others who run “oppression by work” employment.

Others became artists and entertainers and likewise provide employment to others. Some have even been recognised by not just industry awards but civil honours such as knighthoods or their equivalent.

Nearly all got their ability to follow their dreams as vocations and have payed back to society many many more times than that unemployment benifit ever payed them.

Thus the UK saw the benifit of basic income, but others quite falsely claimed the benifit so they could maintain their “oppression by work” that they profited from, which ditctly has led us into recession every time…

Will everyone find a vocation and “pay back many fold” no, but then consider in the past many of the unemployed actually did work, via small charity, leanding a hand, being there to support others.

The fact that they were not rendering to Ceaser via “oppression by work” in no way ment they were not working, and in many ways most were working harder and longer hours than “Nine to Fivers” and so adding to society moving forwards and upwards.

The truth is that most people want to create in some way, and that creates societal wealth. Unfortunately the few who only want to exploit and steal sociatal wealth for their own perversions are those who benifit most from “oppresion by work” and are also in positions where by they can maintain it.

As I’ve remarked before, history shows us that societal oppressors profit systems collapse after war and plagues. The reason the true meaning of supply and demand bites them and bites them hard, thus they loose wealth, power, and status, so their ability to control is significantly diminished, thus limits their abilities to enforce their oppressive and conservative views on society and it’s forward progress.

Unfortunately as others will note taxation previously limited both the speed of rise of the “oppressors by work” and how long they could hold against the effects of supply and demand. Now technology has in effect removed the not much discused in economics “distance cost metric” and sociatal wealth now, once stolen can be put beyond societies ability to recover it. Worse as seen by Iraq, those who hold the wealth can then use it’s return as a method to exert their own control very much against the wishes of that society.

As I said the Devil does not exist, but evil very definately does and society losses greatly as evil prospers. And the only defence against evil, is a strong society that is eternally vigilant. Thus needs to be well educated, and trades equitably thus peacefully with other societies.

Winter February 12, 2023 6:15 AM


What principles does the community use to justify taxes ?

Whatever they want. Just look around and read what people around the world write about government programs they want executed. You want security, someone else wants roads, yet another wants regulations on commerce, or better education, or nature reserves, or less pollution. Take your pick.

JonKnowsNothing February 12, 2023 8:44 AM

@lurker, All

re: Tax the use of money

There are many items in society that are not included as a Money Transaction or have been deliberately exempted from inclusion.

Consider EMail

Email has become a de facto method of communication. It travels along electronic pathways that, are paid for collectively by Governments and Subscriptions to Service. The pathways are not “free” and they provide a highway to a great number of transactions.

Email has replaced physical mail for the most part. We still use physical mail and we still send and receive items by mail or mail freight systems.

First Class Forever Stamps in USA, now cost .63 cents each. A Forever Stamp regardless of when purchased will suffice to send a standard letter. The price goes up over time. It used to cost .01 cents to send a letter.

  • So why does EMail cost us nothing more than the subscription to the electronic highway?

If every single Email being sent cost .63 cents, that would raise an almighty amount of funding.

Hard Mail

  • 213 billion units in 2006
  • 127 billion units in 2022
  • 86 billion units of reduced usage 2006-2022
  • 86 billion units * .63 per unit = $54,180,000,000 lost revenue
  • How come we do not pay for the $54 billion dollars of subsidized communication?

Primarily, EMail is in the exempt list. We pay for the access to the highway and we pay fees and telecom taxes (~$10 USD per month for home connection) added to that. We are not paying for or compensating for our “entitlement”.

You can hear Silicon Valley HOWLING at the idea… it is not a new one, just one that has been discarded for now.

Winter February 12, 2023 9:04 AM


So why does EMail cost us nothing more than the subscription to the electronic highway?

Transporting a letter physically from A to B costs non-negligible work and resources. Transporting a small number of bits over the internet costs fractions of a cent. Metering telephone calls used to cost as much as the call itself. Metering email would cost a hundred times the cost of the email itself.

But if we would have to pay for email, what should we pay for web browsing, which moves many more bits?

It simply does not make sense.

The only reason to tax internet use would be to block access.

JonKnowsNothing February 12, 2023 1:57 PM

@Winter, All

re: Bits cost less than People

This argument has a funny name, we call it

  • flim-flam: Misinformation; bunkum, nonsense.

This obscures the nature of the exchange by pretending the Activity (Mail-Email) and the Means (BitsA-BitsB) (1) are related.

Also, bits are not cheaper than people; all you have to do is count the numbers of people involved in maintaining (or not maintaining) the internet to realize the costs involved.

You may be able to shove bits faster down the wire, but the wires, infrastructure, machinery, mechanics, hardware and software, engineers, CSRs, Moderators, billing departments, etc. form an entire Global Industry of its own.

It does highlight though, how we can “unconsciously & selectively” omit items or categories from Taxation when we perceive it will cost “us” money-funds.

  • I send a few emails a day and probably a dozen text messages. @20 * .65 cents = $13 of displaced revenue.
  • Lots of people send many more. There used to be a Per Message Tariff charge. Once that was removed from direct payment to indirect payment, the number of text messages increased. Your Handy (aka smartphone) can tell you how many you send, as can your email provider.
  • Corporations send a huge amount of electronic messages and Email. Ads touted as “Notifications”. Many corporations offer E-Only billing and statements. (2) Each shift purportedly designed to replace physical costs with bit costs.

There is nothing in Taxation Laws that equate Costs as a basis for Taxes; it’s Income or Revenue. Costs are allowed as a Reduction or Off-Set of Taxes.

If a Flat Tax or Reformed Tax system is being considered, all Off-Sets need to be removed.

  • In USA, if you remove the Tax Deduction for Property Ownership, the entire Real Estate Industry would collapse. Those Off-Sets drive Banking, Commercial, Development and Sales Churn as well as Off Shore Investments. You still have the problem of finding out Who Owns The Property. (3)


1) Modern postal services are nearly totally reliant on BITS to move the mail. Sorting machines, bar code readers, scanners, stamp recognition, QR Codes, hand writing recognition programs, tariff readers, tracking systems, log files and much more.

2) There is a serious legal problem that can arise if you need hard copy proofs of services and residence and the authorities have taken your smartphone. Companies are not required to keep 30-40-50 years of historical records. Countries use this lack of hard copy to deprive some Citizens of their residency and deport them to ancestral countries. UK has gotten plenty of headlines for their Hostile Environment Windrush expulsions, but AU, USA, Canada and other countries are engaged in Banishment too. These policies remain active and have not stopped or diminished.

3) iirc(badly) When very complex tax avoidance strategies started to be reported and investigated, one was intriguing in application.

The need was for some hard tangible asset, where the ownership could be hidden, an amount of funds exchanged to the benefit of the seller and establishing a pass-through tax off-set to the real owners. This pass through had to be structured to hide the true identities of the owners while allowing the offset to be taken against taxes in different jurisdictions.

The item of great value: Ancient Sewer Systems in Germany and Europe.

The villages and towns got a ton of cash and no longer owned the sewer tunnels; plus they did not know who really owned them. Win-Win until the IRS unwound the scheme.

modem phonemes February 12, 2023 11:45 PM

@ Clive Robinson @ Winter

But evil is an opinion by an observer as seen through their perception of “good or bad” as broadly described by the mores, morals and ethics of the society they live in. Which are always in a state of flux.

Laws be they religious or societal are always inflexible such that a clear defence established and judgement be made. We then and only then come to the question of justice.

Whatever they want.

These seem to suggest that it is principled that “anything goes” in ethics and law, the only proviso being “enough” people agree.

It is true that ethics, politics, and law are kinds of practical science and that in such areas there are no naturally given initial truths, instead the starting point is rational free choice, adapting as necessary.

But this is not the same as “anything goes”. From Joseph Owens, Cognition p. 298

“Each free decision … required starting points that … were open to variation in accord with the incessantly changing circumstances that faced the free agent. The starting points of the practical sciences, then, were established by the free decisions of the individual. Yet as the choices of a rational agent they were under the obligation of being made according to right reason. They had to respect the natures of things and had to spring from correct habituation.“

Thus justice must be at the foundation of law, or law is not really law.

Owens goes on to say that as a practical science, truths are inseparably mixed with “good opinion” and hold “roughly or for the most part”. In the area of law, this means the written law will never be sufficient of itself and must be accompanied by equity law, which can set the written code aside from prudential consideration. Nevertheless equity too is not a free for all but has to respect natures.

As a friend used to say, there is no signing on the dotted line.

Wisdom is beloved if her children.

Winter February 13, 2023 1:14 AM


Also, bits are not cheaper than people;

The marginal costs of sending an email over a general purpose computer network are insignificant to the marginal cost of sending a letter over a special purpose surface mail network. The contribution of the bits in an email to the fixed cost of the internet are also insignificant compared to the contribution of a letter to the cost of the surface mail system.

Furthermore, taxes are levied to either have the least impact on the choices of people, or to nudge choices in a particular direction.

To summarize, taxing email neither makes economic nor political sense.

JonKnowsNothing February 13, 2023 2:40 AM

@Winter, All

re: marginal costs v tax nudge

This is an invented argument that has nothing to do with taxation. Marginal costs may have to do with PRICING but not always. The only nudges are in Elastic or In-Elastic Pricing.

Tax nudges are really Tax Avoidance schemes. Buying (X for $Y) and pay (High Tax or VAT) in one region vs buying the same item in another area for (Low Tax or No Tax) is what makes Off Shoring Income such a delightful scheme.

Buying a Auto Pilot E-Car on the basis of “least impact” maybe good for the climate but is a terrible choice from a software reliability and security point of view. Yet people will shell out +$100K USD for one. The subtle hint is the “tax offset” permitted.

In the USA, a whole new tier of E-SUVs has been added to the Tax Off-Set Allowance. They are Sedans by any other name. The manufactures of these E-Sedan-SUV had dropped their price $13,000 USD. Once they were added to the Off-Set, the price jumped $2,000 USD. That’s the value of the Off-set.

Even if you wanted to follow through on the concept that E-Mail is cheaper than Mail, the value of taxation would be even greater as the costs involved would be lower. A small tax of .65 cents would levee enormous tax revenues. If, as you propose, perhaps enough to remove other taxes altogether, like taxes on Heating, Cooling, Water Treatment, Food.

It’s a form of flat tax, that people say they like, but do not really want, once it gets applied to them. A .65 cent flat tax.

One reason this isn’t going to happen is not because of the impact on people, it’s because of the impact on corporations and governments.

The other reason is that the tax is already in effect but as hidden tax which is part of the internet. Some fight over aspects of this is called Net Neutrality vs Network Throttling; either to keep the tax hidden or to expose the tax by throughput delay.

Stamps and Stamp Taxes have a long history. It’s connected to our notion of time. It’s connected to how we date things. How we tell duration. How we build contracts and determine completion dates payment dates. Stamps have driven Wars of Independence too.


Search Terms

Townshend Acts

The Townshend Acts or Townshend Duties, were a series of British acts of Parliament passed during 1767 and 1768 introducing a series of taxes and regulations to fund administration of the British colonies in America. They are named after the Chancellor of the Exchequer who proposed the program.

The purposes of the acts were to:

  • raise revenue in the colonies to pay the salaries of governors and judges so that they would remain loyal to Great Britain.
  • create more effective means of enforcing compliance with trade regulations.
  • punish the Province of New York for failing to comply with the 1765 Quartering Act.
  • establish the precedent that the British Parliament had the right to tax the colonies.

Clive Robinson February 13, 2023 3:01 AM

@ modem phonemes,

Re : Joseph Owens and unfounded assumptions.

It’s around a third of a century since I last looked at some of Joseph Owens’ work which was primarily about what you might call the Judaeo-Christian ethical roots of medieval religious philosophy based on the works of a millennium or so earlier Greek and similar philosophers, who’s deities were of a more earthly and tangible existance.

My overriding memory of what I read is negative because in part it presupposed the necessity of both a deity and a diety given eternal soul.

My argument was that diety belief is very much an invented figment of the human id and is also a way for others to instill certain traits in very young and impressionable minds prior to their ability to cognatively defend against them. So being used as a method of collective control of society (something politics is currently more direct about through primary education).

To grossly over simplify for brevity and compare/contrast,

Effectively we use “Santa Claus and winter solstice” as “the carrot” and “God and purgatory” as “the stick”.

Whilst Santa Claus rewards/punishes in the early life of a child a deity judges for the afterlife. Thus children fairly quickly find that “Santa Claus” is actually a human fiction, but have no way of easily seeing thus cognitively recognizing or going on to satisfactorily “prove the negative” existance of a deity.

Yet evidence abounds that deities are “made by man in mankinds image”. Primarily they advance in a delayed lock-step with human knowledge, so get discarded as human knowledge advances to, and beyond the fantasy of the deity invention by what is politly called mysticism. For instance the Sun and the Moon were seen as god/goddess this became replaced with gods/goddesses of the spirit of things that was already fading in Greek and Roman times to gods/goddesses of behaviours. Likewise Norse and similar gods/goddesses. That is “mankind’s” invented deities move in a conservative way with respect to mankind’s development. Appearing to stay a little bit ahead thus providing both a “boat-anchor” drag on society and an instilled incentive to strive in a direction chosen by others for their benift (see earlier discussion about the “oppression by work” via the “Protestant Work Ethic” that is eminently profitable via “unetned income” to the very few). Deity belief also provides the “godhead” or “earthly messenger of the deity” by which Kings and Queens supposadly gain their absolute earthly authority and excuse of “God told me to…” when the monarch’s whims go bad (something regicide tends to quiet for a short while, and in theory republics kill entirely, yet the seeds of pestilence grow in unattended places, hence “eternal vigilance” is required).

Christianities draw to Romans was simple it gave a way out of physical slavery and oppression by the promise of “freedom in existance etetnal” that was unfounded in any way. Thus like a Will’O the Whisp that can not be pinned down “life etetnal” and the “human soul” notion that underlies it, it evaded simple analysis, thus easy rejection.

Worse the notion of a soul eternal is crass and requires suspension of all that basic science has shown to be proven within our current capabilities. It requires an absolute belief in a mystical barrier that is truly “one way” yet requires no energy/matter or force for it’s supposed infinite existance.

As for Joseph Owens “Cognition” in it’s various revisions, it is not a work that I ever read as it was posited as an introductory reader for students from back in the 1960’s and mankind had moved on considerably in the following near third of a century.

[] As the writer of the “Clockwork Orange” and “Earthly Powers” Anthony Burgess Wilson somewhat ironically put it,

“If a book is hard going, it ought to be good. If it posits a complex moral situation, it ought to be even better”

Thus in that frame of refrence simple, easy books should be treated with caution as half truth explainers, not put forward, for consideration or as the basis of serious argument.

Winter February 13, 2023 3:01 AM


These seem to suggest that it is principled that “anything goes” in ethics and law, the only proviso being “enough” people agree.

In law, which is part of politics, history has shown us time and again that, indeed, anything goes. But that is not a concern of “ethics”, the moral philosophy, but of morals, the real thing.

Morals are not ethics. Morals is what is, a real existing value system. Ethics is the philosophy of morals.

Going back to taxes, that is like criminal Law. Whether taxes are good or bad is for the community to decide, not for the individual. Like we do not accept the opinion of individuals about whether their actions were crimes.

Erdem Memisyazici February 13, 2023 9:27 AM

So … kind of like supply chain attacks the legislative process is targeted to get tax code loopholes. Kind of like tiered disclosure systems the clients who pay the most get to know about a vulnerability before the rest. Kind of like firmware and driver code it’s incredibly complex and easy to exploit because only professional companies look into it.

Kind of like the state of your data’s security it really shouldn’t work that way but it does, because billions get spent.


modem phonemes February 13, 2023 12:12 PM

@ Clive Robinson

in part it presupposed the necessity of both a deity and a diety given eternal soul.

I don’t think this is correct. Owens does discuss the existence of a god and of an immaterial soul, but the arguments are solely from a starting point in nature and proceed by human reason. There are no presuppositions of the kind you mention.

simple, easy books should be treated with caution as half truth explainers, not put forward, for consideration or as the basis of serious argument.

This is also a mischaracterization. There are no “half-truth” dumbed down pseudo-explanations. The discussions are as rigorous as the subject matter allows.

Jakub Narębski February 15, 2023 6:43 AM

Any good ML system will naturally find and exploit hacks. This is because their only constraints are the rules of the system. If there are problems, inconsistencies, or loopholes in the rules, and if those properties lead to a “better” solution as defined by the program, then those systems will find them. The challenge is that you have to define the system’s goals completely and precisely, and that that’s impossible.

Once I have stumbled upon a list of clever loopholes and unintended hacks that various machine learning (ML) models came up with, instead of optimizing what was intended. For example making use of floating point errors in emulation software that evaluated the results, etc.

jdgalt1 February 16, 2023 7:34 PM

The tax system we have in the US is there because it is an attractive target for every lobbyist who can get to DC, and we have millions of them. And they all make efforts, legal and illegal, to get their own Easter eggs written into the code. This is a great example of what economists call rent-seeking.

What makes it rent-seeking is that none of those lobbyists’ efforts create any new wealth for anybody. All they do (when successful) is to shift some existing money from some people’s pockets into others’.

In terms of efficiency for the outcomes the government is trying to achieve, a progressive, graduated tax system is about the worst system you can have. Why? Do the math. An efficient tax system, by definition, would collect the most revenue while penalizing, and thus preventing, as little wealth-producing work as possible. To do this the average tax rate should be high, while the marginal rate (the amount that an individual taxpayer’s next potential dollar’s worth of work would be taxed) should be low. But progressive tax systems feature low average tax rates and high marginal rates — the highest marginal rates being aimed specifically at the most productive people, those whose next hour of work would have produced the most new wealth.

And there is no fixing it. Even if you somehow got a flat tax written into the Constitution so it could never change, the lobbyists would just go to work on the Supreme Court. Look at how they have already changed the whole federal structure of the US just by installing justices who would invent a completely bogus definition of “interstate commerce.” You can’t win.

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