walkitout (walkitout) wrote,

Government Limits on Paying in Cash

My not-brother-in-law is a tough guy to read: it can be almost impossible to tell if he's serious about something, or just stringing you along. I mostly don't care, because I kind of like exploring ideas anyway, and if someone's willing to play, I don't mind if they go laugh about it later.

In any event, he was pushing pretty hard a get-rid-of-cash idea, replacing cash with government accounts so all payments would be account-to-account transfers (I would call these giros) and thus trackable, subject to traffic analysis, pattern recognition and so forth. He was talking from a drug dealing detecting perspective, which I argued with on the basis that if all payments are within this system, it shouldn't be that hard to make one kind of activity look like a different kind of activity, if you put your mind to it (really, what exactly is the difference between selling legal versus illegal agricultural products? I don't think this is as obvious as he was arguing, and by the time you got done pissing people off for engaging in legit business and failing to make the case stick against the ones who really were engaging in shenanigans but could weasel out of it somehow, you would wonder why you were even bothering, then the electorate would just legalize everything anyway so what's the point?).

I was prepared to accept a thesis that make-everything-giros-to-support-tax-collection, but he wasn't going there, which is a pity, because it is a great example of how once you did it, you'd just be legislated out of doing what you intended anyway.

So that's where that was when I came home, but I continue to be fascinated by the idea that someone who would like to pretend that he's right-of-center can go walking around advocating such a designed-to-set-off-the-black-helicopter-crowd argument. I'm assuming he was joking. But check this out. Italy has _already_ put limits on the size of transactions you can conclude with cash.


I knew from the Cyprus coverage that paying the rent in cash is kinda common in Southern Europe and related areas (and for the record, I think paying the rent in cash is nuts in so many ways I just don't even want to get started). This is part of why I figured that making everything be account-to-account (which is basically what a check is, after all, when you don't let people get cash for the check unless they have an account at the bank in question, which is increasingly common, especially now that third party and other weird things to do with checks are effectively impossible) would be done in support of tax collection.

Spain seems to have a E 2500 limit.

France has a E 3000 limit (altho that's a little complicated):


That link is actually the one worth reading, because it gets into the cost of payments systems and who bears them. The costs of cash are borne by the government. The costs of payment cards are borne by issues, merchants, and end-users, depending on the legal environment and contractual agreements. Etc.

But while that article mentions the issue of trust in passing, what is missing from virtually all payment systems discussions is the potential for universal account-to-account payments to _increase_ trust. While the right worries about the Guvmint spying on us and/or taxing us to death and the left worries about poor people being left out of modern payment systems and/or the elderly being unable to keep up with All These Changes, no one is pointing out that in a world in which every single payment can be tracked all the way back, no one can Get Away With Shenaningans Ever Again. There will always be a trade-off between the hassle of Getting What's Coming To You vs. just Sucking It Up and Moving On, but it won't ever be a matter of not being able to prove the chain of transactions.

Also, the cost of cash to the poor is tremendously _high_ in our mixed system; they get charged to go to cash from every other kind of payment, so it's really no favor to them.
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