The War Against Cash, Part I

This is the first in a two-part series, originally published at International Liberty. ~ Ed.


Politicians hate cash.

That may seem an odd assertion given that they love spending money (other people’s money, of course, as illustrated by this cartoon).

But what I’m talking about is the fact that politicians get upset when there’s not 100 percent compliance with tax laws.

They hate tax havens since the option of a fiscal refuge makes confiscatory taxation impractical.

They hate the underground economy because that means hard-to-tax economic activity.

And they hate cash because it gives consumers an anonymous payment mechanism.

Let’s explore the animosity to cash.

It’s basically because a cashless society is an easier-to-tax society, as expressed by an editorial from the U.K.-based Financial Times.

Using cash for secondhand transactions now illegal in Louisiana

Sometimes I see things that I just can’t believe are true. This is one of those times.

Earlier this year, the Louisiana legislature almost unanimously passed a law that prohibits the use of cash in secondhand transactions.

The story on this one is that the law is intended to create a paper trail when people steal things like copper or other materials from a construction site. Forcing a check, money order, or electronic payment would make it easier for law enforcement to find a thief. I understand that argument, but there are some real problems with this law.

U.S. currency is valid for all transactions. On the front of our currency is the line “This note is legal tender for all debts, public and private.” Prohibiting the use of legal tender is a bit of an oxymoron.

Records of each transaction must be kept for 3 years. When you hear people like me fussing about unnecessary government regulations hindering businesses, this is the type of thing we’re talking about. This law requires businesses to keep very specific records for each second hand transaction so that law enforcement can find people they suspect are thieves.

The information to be collected by the dealer includes: date, location of purchase, name and address of seller, driver’s license or passport number of seller, license plate of vehicle used to deliver the goods, a full description of all materials being purchased.

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