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Comment by bhaavan | Hacker News Reader

I think the government, holds to benefit from this, and there might be no need of lobbying. Any transaction in cash for such a high amount, is intentionally done to keep the transaction off-book (and avoid taxes). There is little reason, why one would go through the inconvenience of managing so much cash, when a digital transaction is so much more ergonomical.

India too is aggressively trying to achieve this. One of their rather bold attempts, called demonetization, happened a few years back, but it failed. However, in principle, I agree with the idea of having a cashless economy, so that government has data to see who is lying in their tax returns.

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> I agree with the idea of having a cashless economy

Just remember that a cashless economy is one where you must secure permission from a person you can’t see and have never met every time you wish to acquire food, shelter, or clothing

That's just a normal environment that most middle class people who use debit/credit cards are already used to.

> That's just a normal environment that most middle class people who use debit/credit cards are already used to.

No it is _not_ the normal environment. He said "you must secure permission" from a third party. This is not true for those who use debit/credit cards because they also have the choice to use cash as well.

A side note: cash and cashless work great with one another. If your card stops working some reason, you are still able to use cash. If you don't want to carry cash one day, you can use a card. I find it very frustrating that they are constantly pitted against each other when they are in no way incompatible.

Not much choice if your employer transfers your wages to your bank account anyway. To get hold of the money, you need to use a debit card, a check, or the service of a bank teller. In all cased, a third party, or several, is involved.

It's a bit like in ancient Sparta, where the currency was mandated to be iron, so that large cash transactions would become cumbersome, and would be very visible.

>Not much choice if your employer transfers your wages to your bank account anyway.

I don't think gp was talking about not requiring permission ever. He was talking about not requiring permission on a per transaction basis.

Those middle class people are privileged, for now: The third party doesn't stop them getting their food and shelter.

The unbanked, on the other hand, will be at greater risk of starvation when you need a bank account to obtain food.

Everyone can get a basic bank account, you say?

Well, it's the law in the UK already that some people are not allowed a bank account (you need to prove your right to a bank account in the UK, along with your right to rent shelter).

They are still people, and they will still starve in a cashless economy.

I know this, because I already know people who are getting by on half a meal a day, and that's today.

Obviously laws will have to be changed to support a cashless economy. You're attacking a strawman by assuming that a cashless economy must exclude people because of contradictory laws like the UK one you mentioned.

I don't think it's a strawman, because I think laws like the UK one come from a motivation or principle which is not going away. That is: to make laws that sound appealing to enough of the population, which make life ruinously and cruelly as harsh as possible for a minority.

The principle being "if we make life unbearable they will somehow find a way to leave, we don't care how as it's not our problem, and we don't care if it's so unbearable that the quality of life is significantly worse than the minimum our human rights principles theoretically guarantee".

Essentially, they are already supposed to survive on magic or starve and die, even though no minister would admit that. (And some of them _are_ dying.)

It seems clear that the government which instituted those laws does not seriously consider the wellbeing of that minority, as if they aren't people at all. Political statements like "making a country for the good of all" are meant to gloss over the fact that said minority is not part of the "all".

I think it's this principle which is in play on an ongoing basis, not the laws of the day.

So in a cashless economy, I think the principle of "as harsh as possible and we don't care about their wellbeing or basic human rights" will continue, and due to system side effects (rather than intentionally), the consequences will become progressively more severe for a minority.

For people to not be excluded in a near-future cashless economy, the driving principle would have to actively change, to make sure everyone has some access to the cashless economy, and at the moment, I see no sign that popular governments would implement something like that.

I don't understand how people could morally support a push towards cashless without at least those laws being change _first_.

I sometimes do medium to large transactions in cash so I don't have to pay things like credit card fees. $600 set of tires? Why should visa get $18 (3%)? I don't mind stopping by the ATM to save that.

Also, maybe I just don't want everyone knowing everywhere I spend my money. I tried to get a mortgage a bit over a year ago and they wanted to see statements from all my accounts for the last 6 months. It's none of their damn business if I spend 500 a month on champagne or 500 on church donations.

Them looking at your accounts is more about income than expenses. They want to see how much money you're making and that it is recurring. They don't want to give you a loan based on you having $x and then find out the only reason you have that is because your friend gave you a loan for it. That would make you less likely to pay the mortgage back because you have other liabilities. So if you have a cash deposit they will want an explanation.

You may be able to open two accounts, at two banks. Put your reliable income into one, and transfer it monthly to the other, which you use for irregular personal spending. Give the loan company the statements for the first account.

It's a requirement to do so for ALL your accounts. Same for naturalisation applications, which I'm also doing.

Last time I applied for a loan, they followed up asking for bank statements for the account I had given on the application form to receive the funds.

I agree with you, and that doesn't seem right, but it is what the request asked for.

In your perfectly dispassionate banking office this is true, but in reality, people will judge, even subconsciously (though the subconscious bit is giving too much credit).

To give a true, recent, example, I might not like having the loan officer know about my donations to the Green Party - they could be right wing, after all!

Also, some places are just small and people gossip.

For the last tax filing that needed a voucher for income, I blacked out pretty much everything except the amounts received / sent. Is this not allowed in such a case for you in the US?

Tax statements are sufficient for proving income. Banks also need verification of the origin of funds for the down payment and closing costs, which is where the other statements come in.

I don't know. I don't live in the US anymore.

Cash is freedom and privacy. Cashless is tyranny and scrutiny.

This is why we say innocent until proven guilty in the West. There is a social contract that is is better to let a murderer go free than to let an innocent person rot in prison for a crime they didn't commit.

The same social contract exists in society for cash. Cash exists so that we have privacy and freedom at the cost of criminal activity.

Cashless can also be anonymous, but that won't be presented as an option of course.

You are so right about the innocent until proven guilty.

> However, in principle, I agree with the idea of having a cashless economy, so that government has data to see who is lying in their tax returns.

This is really bad, because it prevents any kind of privacy. Want to buy a huge dildo from HugeDildos Inc.? Now you can just pay with cash. With cashless economies, you will now have their company name on your bank statements.

And this is just a stupid example. What do you do in a case where you have legalized Marijuana at a state level and illegal at federal level (like in us). You can sell it in your state, but you cannot get a bank account.

And what happens if there's a blackout? How do you buy food?

I'm not a fan of the bill, but it is only restricting payments over $10 000. You can still buy dildos with cash, unless it's gem-encrusted or something like that.

First they came for the big purchases, and I did not speak out because I was not a big spender.

Then they came for the food/clothing purchases, and I did not speak out because I had my credit/debit card.

Then they came for huge dildos, and there was no one left to speak for me.

That's just the first step.

They lowered the limit to 420eur for independent contractors and companies here in Slovenia. They wanted to lower it to 50eur, but luckily failed.

In Spain you cannot pay anything over 1000€ in cash.

The discourse is well known, and in HN terms is like this: "why would I want PGP or SSL? Only if you want to do bad things you need that level of privacy". So "Why would anybody want to pay cash if he is doing everything within the law?"

That's almost certainly how it starts, but they will inevitably try to restrict it more if this succeeds.

> Any transaction in cash for such a high amount, is intentionally done to keep the transaction off-book (and avoid taxes)

What if you wanted to buy a $25,000 car in cash from a dealership? That's not intentionally avoiding taxes. It's trying to get a better deal.

It's not unreasonable to want to avoid keeping a lot of money in a checking account in the US. They offer 0% interest rates. It doesn't make sense to have large sums of money sitting there. Why let the bank profit off your money if they aren't going to return some of it back to you for letting them use your money to make them more money.

> What if you wanted to buy a $25,000 car in cash from a dealership?

I think you’ve not done this in the past twenty years, or just heard the phrase and misunderstood it.

“Paying cash” at a dealership for a new car doesn’t mean literally bringing in paper currency. Generally you pay via cashiers check or wire transfer (rarely via personal check, but with a waiting period most of the time then). Saying “paying cash” at a dealership means “not financing the vehicle.”

I’m not saying it’s not possible to use paper currency, I’ve done it myself. For anything of value though, you’ll generally get a less enthused recipient (as they’ll have hassles depositing it), not to mention the hassle you’ll get just to withdraw the money. As an example in the US, withdrawing over $10k in cash requires filling out paperwork. Withdrawing much larger amounts will generally involve even more scrutiny. Trying to break up the withdrawals to stay under $10k will very likely set off red flags with the bank and lead to inquiries from their compliance department at best (usually much worse).

There's no waiting period if you pay by check. (Yes, real world personal experience.) Don't forget they're happy to let it go with just a promise to pay later.

I’ve paid by personal check before too without a waiting period, but I also have first hand knowledge that it’s not the norm, at some dealerships anyway. Obviously every place will likely be somewhat different.

The beauty of cash is that everyone knows "it's good" (ignoring counterfeiting for the moment). There's no "stop payment" on cash.

If I'm buying a car from a dealership, ACH/e-check or regular check is fine. If I'm buying a classic car or a boat from a private seller on a weekend, cash is still king. A dealership may prefer a check over cash, but a private seller who is on the fence about taking your semi-lowball offer is often somewhat motivated by seeing physical cash and imagining (even if subconsciously) having the cash and being done with the transaction.

Physical cash's non-recourse is a security problem for theft, of course.

Try going and depositing $50k in cash at a US bank (let alone orders of magnitude more) and tell me it was a pleasurable experience. As someone who’s withdrawn and deposited multiple large amounts of cash (largest being in 7 figures range), I can say it’s a real pain.

> What if you wanted to buy a $25,000 car in cash from a dealership? That's not intentionally avoiding taxes. It's trying to get a better deal.

Eh? The normal way you get a better deal by paying upfront is by avoiding the financing costs or convincing them that you're closing the deal immediately - although sometimes the financing makes the dealership money at the expense of the manufacturer, so it could go either way.

All other possible ways of getting a discount for cash involve either tax evasion or fraud (e.g. salesperson gives you 5% off, writes down 10% off in the records and pockets the remaining money).

> It's not unreasonable to want to avoid keeping a lot of money in a checking account in the US.

The bank is insured, while you're not, and at risk of being held up at gunpoint by robbers or the police. Keeping a large amount of physical cash lying around incurs security costs and risks.

> What if you wanted to buy a $25,000 car in cash from a dealership?

A Dealership in America is never going to say No to an actual buyer, but they'll encourage you to finance (that's where they make their profit) or bring a check (large amounts of physical currency and filing Suspicious Transaction Reports are annoying).

Only private sellers want actual cash because our financial system exposes the recipients of any other form of payment to too much fraud risk.

Why would the dealership offer a better deal for cash payment than for s check/bank transfer, unless they want to underreport the sale price and the taxes owed?

A check would likely be the same deal as cash. But there's no incentive to keep that amount of money sitting around in a checking account.

I don't think a dealership would try to under report the transaction for tax evasion purposes. There's too much risk. The customer will get a receipt for the real amount they paid, and it's also very possible the customer will report the transaction on their taxes as a business write off.

> I don't think a dealership would try to under report the transaction for tax evasion purposes.

Ah yes, the famed honor and integrity that the car dealership profession is known for.

> customer will report the transaction on their taxes as a business write off

Businesses don't do this. Unless they're money laundering fronts, businesses don't buy stuff in actual physical cash unless they have to, and they know that any cash discount would be from under-reporting the sales tax and that recording the transaction would be bad for both sides.

I take it you haven't done any home remodeling work lately? Businesses like plumbers _love_ cash, in the sort of amounts under discussion. Thinking it doesn't happen is just bizarre.

That's not paying the business, that's paying the person - it's exactly the same thing one step back. That cash won't appear in their business accounts. The whole purpose of paying them cash is to enable their tax evasion.

Simply false. In every case of my personal knowledge, and there are very many, it has been to protect the right to privacy, and no taxes have been evaded. I find use of cash in all amounts to be increasing as surveillance increases.

> Businesses don't do this. Unless they're money laundering fronts, businesses don't buy stuff in actual physical cash unless they have to, and they know that any cash discount would be from under-reporting the sales tax and that recording the transaction would be bad for both sides.

There's nothing wrong with buying computer parts with cash for your business and then writing it off. I do it whenever I'm in a pinch and want something "right now" instead of ordering it online and waiting for shipping. A store will give you a receipt.

I choose to use cash whenever possible to purchase small and large things because I don't like the idea of banks and other payment providers profiting from me without sharing those profits.

Unfortunately my business involves accepting money digitally, but I say it's unfortunate not because I'm trying to cheat any systems. It's because I'm forced to allow banks and other entities to harvest my private financial data and leverage my money for profit, and the alternative of not doing that is worse (ie., I personally accept it instead of being unemployed and homeless).

> Businesses don't do this.

My old bar owner had no option but to pay the liquor distributor in cash (for various reasons) with both parties having no intention to engage in tax evasion.

Well, maybe the bar owner was but I believe liquor receivables were how the tax man determined if he was under reporting income so his books had to align with the distributor.

Not paying a middleman a percentage of the transaction would have some value to it.

> called demonetization, happened a few years back, but it failed.

It failed because it was designed to fail from the start, the govt introduced higher denomination notes (2000 Rs) which is a boon for money laundering.

The inevitable consequence is absolute despotism. Without privacy, there can be no freedom.

I don't think that is a worthwhile price to pay in order to preserve an obsolete system of government funding. Especially since it won't work anyhow.

Just noticed the 10k ceiling. That would make sense. For whatever reason I thought the proposed law was more restrictive than it actually was. I guess the late hour here is taking its toll.

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