Underground Economy???

[Shuffler]

So, what you're saying is I should only be taxed on the portion of my wages that I save?  Interesting...





(I think the IRS disagrees...)

I believe what he is saying is just like making a donation to a charity. If you make a $100 donation and recieve a meal (such as a BBQ brisket meal) you can't claim a $100 donation as a whole. You have to deduct the value of the meal you received in return then you can claim the balance as a donation. If you received something of equal value then you have no donation deduction.

Sales tax is only for SALES. Now if you have a TRADE tax.......

[sluggish]

I believe what he is saying is just like making a donation to a charity. If you make a $100 donation and recieve a meal (such as a BBQ brisket meal) you can't claim a $100 donation as a whole. You have to deduct the value of the meal you received in return then you can claim the balance as a donation. If you received something of equal value then you have no donation deduction.

Sales tax is only for SALES. Now if you have a TRADE tax.......

My wage is an equal trade for my labor.  There is no net gain.  This is an agreement that each of us makes with our employer.  You say "I will do X and it is worth X".  Your employer agrees "You will do X and it is worth X".  This is an even trade.  Now, you and your neighbor decide "I will give you X tomatos and you will give me X radishes".  You neighbor agrees "You will give me X tomatos and I will give you X radishes".

Both of these are identical transactions.  If one is taxable, so is the other.

[Die Hard]

But only one involves money.

[Shuffler]

My wage is an equal trade for my labor.  There is no net gain.  This is an agreement that each of us makes with our employer.  You say "I will do X and it is worth X".  Your employer agrees "You will do X and it is worth X".  This is an even trade.  Now, you and your neighbor decide "I will give you X tomatos and you will give me X radishes".  You neighbor agrees "You will give me X tomatos and I will give you X radishes".

Both of these are identical transactions.  If one is taxable, so is the other.

Your wage is not taxed under SALES tax. That is income tax.

[sluggish]

Your wage is not taxed under SALES tax. That is income tax.

Oh.... do tell how my wage isn't taxed by sales tax.  This should be interesting!

[Tac]

Last I checked one could only be taxed on what is purchased with / what you get paid for in currency.

Barter does not use currency ergo it cannot be taxed.

Said example of trading your $500 worth of labor for a $500 computer ... well, that $500 computer already paid tax by the person who purchased it with currency (the retailer, the owner bartering it to you, etc)..and your labor is precisely that: yours. The gov. can't dictate that you have to charge currency for your labor.

Or, better yet, if I grow a year's worth of vegetables and barter them for a year's worth of meat from a cattle rancher... the only thing im exchanging tax-free is my labour. Both the meat and the vegetables require land to grow on (you pay taxes for that), both require upkeep (fertilizer/cow feed, fuel, electricity, etc) which in most cases, is also taxed. So the question is... am I cheating the gov. or is the gov. cheating me when it comes to taxes?

[Shuffler]

On the flip side I have to pay taxes on the computers, furniture, trucks and other office things when I buy them.... and then every year they are owned by my company. Every single year I am taxed for everything I own already over and over. Criminal isn't it.

[RTHolmes]

Last I checked one could only be taxed on what is purchased with / what you get paid for in currency.

But only one involves money.

tax law is different worldwide but in the UK there is the concept of "benefits in kind". A typical slary package will include currency and "benefits" eg. a company car. your tax liability includes the value of the company car. someone who earns £25k and has a company car which they have also for personal use will pay more tax than someone who earns £25k without the car.

or ... a rich uncle dies and leaves you £1m in cash, you'll pay tax. if he leaves you £1m in shares, no tax? £1m in property, no tax? £1m in radishes ... ?

[Phaser11]

Yep,
 I started doing this sort of thing this week. I need some work done on my truck (very little) and a friend needs his computer reloaded. Also around here there is "local Money". It is exchanged for US dollars + about 5% (1.00 usd = 1.05 other) so when you shop at a store that accepts these "dollars" you get more for your money. It was done here and many places in our country durring the deperesion and is making a comeback. Being the tax is still payed, uncle sugar still gets his money so he keeps his mouth shut.
 But more and more here at the plant we are exchanging services. Fall is comming soon and a few of the prople here have large gardens with corn, onions and the like. I set up 2 deals with them already (which I an doing in advance). As strange as it sounds, it gives us something to talk about besides the hard times.

One I just thought about while writing this message, with the price of ammo, I think I'm going to offer some 3030 rounds and other support and have one of the hunters take a dear (or split one) with me. hmmmmmmm

[Dragon]

Look at it as a "free trade agreement"  If governments can do it, well.....

[Anodizer]

I've read about some places that have made their own currency that can only be spent locally.. 

[Reschke]

Barter can not be taxed as no money actually moves between an entity. If you barter/trade for a good deal then you have done nothing. In fact you already paid taxes when you bought the land, etc... to grow the animal and they paid taxes when they bought the fuel so nothing is going on illegally here.

[CAP1]

Any attempt at evading the tax system is indeed illegal.  While bartering in and of itself is legal, not reporting income of said barter is illegal.  For example,if you are an electrician and you agree to do an electrical job for someone at $500 and then they agree to give you a computer with a market value of $500, then that $500 is taxable income to you.

technically, there is no income from a barter deal.

that computer in your example is simply a product traded in exchange for a service. there was no money involved.

[FX1]

My wife owns a large house cleaning business in Austin. She barters all the time with her clients. Each week she has a massage, piano and guitar lessons. Its great for me because their is no money going out of pocket and her cost is only in chemicals.

[Tac]

tax law is different worldwide but in the UK there is the concept of "benefits in kind". A typical slary package will include currency and "benefits" eg. a company car. your tax liability includes the value of the company car. someone who earns £25k and has a company car which they have also for personal use will pay more tax than someone who earns £25k without the car.

or ... a rich uncle dies and leaves you £1m in cash, you'll pay tax. if he leaves you £1m in shares, no tax? £1m in property, no tax? £1m in radishes ... ?

A company car is almost as if you were leasing your own vehicle but without paying the monthly fee. If you agree to receive a company car as a benefit then someone has to pay the tax on the vehicle and the company is at that point dumping that on you (since you're using it). In this case it is not a barter agreement, its a business agreement between you and your employer and there is currency involved in between (your salary and the fact the car does have to pay tax).