Hacker News Reader

Comment by lockhouse | Hacker News Reader

I understand the advantages of this for the government. It will be much easier to track and control how we spend our money and ensure that we pay every last possible cent of taxes.

What is the advantage for me as a citizen?

View on HN

> ensure that we pay every last possible cent of taxes.

Is that a bad thing? (The end, not the means)

It may be if you believe the government will do evil things with the money, which is often a reasonable belief.

The issue isn't the taxes but the way in which they are used to transfer money from the middle class to the other wealth classes.

More taxes won't mean better quality of life for the governed but more waste and the lining of the pockets of the politically connected.

It is also difficult to see what good scenarios this enables. This tech in China is being used to un-bank people who the government thinks are troublemakers. It also looks like it would enable direct-to-consumer money printing which will end poorly (but, I suppose, is better than handouts to the wealthy).

The UK government, and Western governments more generally, have a terrible history of lies about who they are going to use this sort of capability on. It starts out being sold to catch child rapists, murderers and foreign agents then a few years later we get to discover who is actually going to be targeted. The US's system of anti-terrorist laws have turned out to be for internal use and it is a stroke of justice that they are more threatening to the right wing, who championed bringing them in.

People really need to get it through their thick skulls that centralising power => your political enemies will have more power when it is their turn.

Be less concerned with the money printing, and more concerned with expiring money, making pensioners go back to work to “solve labor shortages”. Programmable money via central bank digital currencies (CBDCs) enables more granular economic control over citizens, that is its purpose.

(China’s digital yuan has/had an expiring voucher version of the currency issued)

https://www.theguardian.com/politics/2022/dec/24/uk-governme...

https://www.theguardian.com/business/2022/nov/02/i-cant-work...

https://pca.st/episode/fca3c402-4383-427e-9dd4-e5355d270ba1?... (15:20-~20:00)

In theory if the gov can collect all tax then taxes should be lower.

In practice, a government with unlimited capacity for raising taxes will just expand its scope indefinitely.

If only the population of the UK was allowed to choose their government.

Even considering the Laffer curve, no government today has tax rates at what empirical analysis suggests would be revenue maximizing, so not sure this is true.

> no government today has tax rates at what empirical analysis suggests would be revenue maximizing

Because of all the friction in raising taxes on a cash based system. That's the whole point.

What? No, the Laffer curve already describes that. And best approximations of the rate at which the incentive to shirk taxes is so high as to lower total revenue are nowhere near where rates sit now, basically everywhere.

No. The Laffer curve is about taxable income elasticity. It says nothing about the practical challenge of tracking taxes owed and actually collecting them in a cash based system as the parent was suggesting

Is tax avoidance/evasion not a part of taxable income elasticity? My understanding was that it is

I suppose it could be fine to include it that way... Ie. A cash based world where tax evasion is harder to detect would have higher elasticity of taxable income. It's also true that the model does not require any tax evasion at all.

Don't mistake the map for the territory. Model behavior proves nothing.

In the UK that has had a functional transaction system for half a century, not that much. In the US it would be revolutionary to stop mailing checks between banks.

I suppose ideally your money can’t be stolen? E.g., if someone hacks you or something similar, the government can invalidate that currency. Plus reduced money laundering, since it’s tracked, which theoretically reduces crime and makes it easier to track.

Personally I only see physical currency being deprecated over the next several decades, considering most people don’t really care about privacy anymore (including me, to be fair).

It's 2032. Covid Alpha variant is running rampant. In an attempt to prevent Americans breaking mandatory isolation electric cars have been disabled unless authorised by your neighbourhood state leader and all non-online transactions have been blocked.

I’m not saying this is necessarily a good thing. When I say I don’t care about privacy, I mean that I don’t use VPNs, I don’t use ProtonMail, I don’t disable cookies or JS, I don’t use cash—all because I value convenience. Is this short-sighted? Maybe, but I am in a position where I (generally speaking) trust the government. That’s not true of everyone of course.

And, key here, you trust the government now. If a government you trust erodes privacy over time & then a government you don't like gets into power you're screwed.

Ad block?

> It will be much easier to track and control how we spend our money

Will be? will in future ? The majority of my GBP transactions are digital already - they are not pieces of paper with picture of the late Queen changing hands, they are database records, mediated by a "buy" button in the web browser, or the tap of a card onto a reader.

The currency is mostly digital, already.

Yeah, over distributed databases controlled by multiple competing entities. With a single system under the government's purview, it's orders of magnitude easier for any government agency to get that data consolidated.

> it's orders of magnitude easier for any government agency to get that data consolidated.

I don't buy that; if the government (UK or otherwise) wanted a consolidated view of all transactions (at what stage: acquired, captured or cleared ?) then they could get it from a low double-digit number of sources.

Building their own payments processing system is hard, perhaps as hard as getting feeds from all of those.

The sheer amount of cash hoarded by tax evasion, and the very public effort in creating this central government backed blockchain attest to the contrary. For all we can speculate, we will have to wait and see. I dread this possible future and hope it doesn't come to pass...

I see and acknowledge the catastrophic loss of privacy that digital currency portends

> What is the advantage for me as a citizen?

There are some, trivially.

The overhead of handling cash is eliminated. Moving bundles of notes

Reduces the possibility of theft

Related, makes the security of your stash somebody else's problem

The opportunity cost of proton notes and mounting coins is recovered

Knowing everyone else is playing by the same rules has value to me.

I'd limit property purchases and political finance to domestic -earned wealth. You'd be able to import wealth, but you pay tax on it and its person of ingress goes on record. Too much of this country is bought and bribed with dark money.

I'd apply HMRC/money-laundering checks at 1k, not 10k to stop people working for cash. We've had some building work this last year and about half the trades and suppliers offered "cash prices", to the tune of £30k lost tax revenue. Fired one guy for moaning about immigrants and then offering cash rates.

Countries like Greece and Italy nearly collapsed because of nonfunctional revenue systems. We're pissing around with IR35 when what we need is an army of auditors or traceable currency.

And yes, per the sibling comment, this would have to be the only currency. Half measures have no benefits here.

More granular economic data probably means better monetary policy and fewer systemic risks.

How are you imagining that more granular data would help? It probably won't make a difference. The lag time between action and result is measured in years and there are shocks along the way.

And even if it did, we've never really had the public debate on monetary policy. I reckon the median voter would, all else being equal, want "stable prices" to mean that the prices don't change on average. It isn't at all clear we want the community who thinks "stable" means "exponential increase" to be made more effective in their work.

If there's a government-blessed open, digital way for a citizen to pay taxes and government services, merchants and banks are highly incentivized to standardize around integrating their payments services on it.

Not only that, they will have a much more fine grained inventory of things you own.

Convenience might be a personal advantage.

Not only that, most tory MPs will now have investments related to digital currency and will make a load of money off the back of this.

You seem to be supposing that the digital pound will replace the physical pound. Do you have any evidence to back that up?

Blockchain cures cancer and makes you more handsome. Imagine what it would do for national fiscal policy.

Reply on news.ycombinator.com