Comment by katz | Hacker News Reader

Comment by katz | Hacker News Reader

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> I see no reason for secret banking other to subvert laws.

Replace the word “secrecy” with “privacy”. I think there are a lot of good reasons to keep your personal banking details private. For example – in my country there is a law that the bank have to inform a government department if there is any deposit above about $1000. Thinking of donating to a political party?

You must show proof of fixed residence to open an account (even if you always have a positive balance). How would a poor person without a fixed address (as defined by government) open an account?

> and drug trade.

Because people voluntary give money to buy drugs and people voluntary sells drugs. What is the problem?

> at its worst enables terrorism

It is a stretch to blame private banking for terrorism. Terrorism will occur regardless of banking laws.

> At "best" it enables the very wealthy to not pay their fair share.

If there was a flat tax regime you can (maybe) try to make that believable. Why is it that rich people pay a higher percentage of their income in tax? It is simple – ten wolves and a sheep deciding who is for dinner. The whole idea of progressive taxation is the mob taking what it wants because of its majority – there is no inherit “fairness” in it.

A politician buys the vote of the poor with the money from the rich (coerced through taxation).

> If you have a problem with being overtaxed, the only respectful approach is to be active in managing how your government works.

In my country there are 4 million tax payers and about 14 million people receiving government “grants” (this will probably quadruple in a year's time in a plan to give everyone a “basic income grant” (BIG)). Is it fair that 4 million productive people subsidise 14 million unproductive people? Is it fair that a young tax-paying couple puts off having a child – yet their tax dollars is used for other peoples' child grants?

> And a "good" lawyer should never cover for crimes.

A “good lawyer should always act in their clients' best interest – whatever it may be.

In summary my argument is as follows:

1.There are plenty of reasons why banking should be private. 2.IMHO tax evasion by overtaxed people (i.e. when the tax percentage is progressive) is not morally wrong.

EDIT: Downmod all you want.

I generally agree or fail to disagree with most of your post, but on the particular topic of progressive taxation, it's not fair to simply dismiss it as "10 wolves and a sheep": marginal utility is at play.

With all goods, the more of it you have, the less valuable it is. Individuals allocate goods to satisfy their most critical needs first. Ipso facto, the first unit of the good is worth the most, the second unit less so, and so on until the final unit is worth the least.

And money is simply a good, more fungible but otherwise no different than any other. The greatest utility of money is achieved by providing the necessities of life: food, drinking water, shelter. The next greatest utility is achieved by providing the basic comforts of life: showering water, clean laundry, furniture. After that comes longer-term goals, and so on (roughly mirroring Maslow's hierarchy of needs).

Now imagine two people, A and B, who earn $20,000/year and $80,000/year respectively. It's more unethical to take $200 from A than it is to take $800 from B. Why? While taking money from either one should be minimized (or preferably eliminated), in all likelihood A's $200 was going to meet a more critical need than B's $800.

As an argument ad absurdum, imagine that instead of taking away a flat percentage (1% of annual income for both), a flat absolute amount were taken instead ($500). The total amount taken would be the same, but now it would be evenly divided among both A and B, regardless of income. This would be the most fair arrangement of all, would it not? If a progressive tax is less fair than a flat percentage tax, then surely a flat percentage tax is less fair than a flat absolute tax. The flat percentage tax is still "punishing" B for making more money than A, when instead it "should" treat them equally and not care what their incomes are.

Clearly, though, this line of thinking is absurd, because A will be harmed disproportionately. Whereas taking $200 from A might prevent A from paying the electric bill, taking $500 from A might instead prevent A from paying the rent. The result is that, relative to the flat percentage tax, A has lost the fulfillment of a more critical need, while B has gained the fulfillment of a more minor need.

> Now imagine two people, A and B, who earn $20,000/year and $80,000/year respectively. It's more unethical to take $200 from A than it is to take $800 from B. Why?

Just taking money is wrong. The usual argument is that the government takes money from people to provide a service. If the government takes more money from you and provides less of a service (i.e. it is busy with wealth redistribution) it is wrong - it is simple theft by the masses.

> As an argument ad absurdum, imagine that instead of taking away a flat percentage (1% of annual income for both), a flat absolute amount were taken instead ($500).

The argument for flat tax is usually that in order to make money a person uses the infrastructure (roads, ect...). If he makes more money the argument is that he used the public services more. While this is not correct (lower income groups disproportionately use public services) it can be argued as such. There is however no defence for progressive taxation - other than wealth redistribution.

katz, I hear you. Perhaps some of your rational applies to people living in countries that do not have the same government infrastructure as we have in the U.S. Your perspective may be different for that reason. But for the U.S., secret banking only serves to do illegal things.

I'm not talking about privacy. I am talking about secrecy. Governments do have a right to tax. Secrecy from governments only allows the process to subverted.

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