Sales Taxes, Cash, And Modern Payment Systems – OpEd
One of the first lessons I learned while working with Americans was this: not paying taxes is wrong, but avoiding unnecessary taxes within the bounds of the law is a natural right. This mindset was especially prevalent in the past, particularly in the buying and selling of properties or vehicles.
Back then, payments for houses, cars, or boats were often made in cash, carried in a bond bag. Sale prices would be understated to minimize the tax burden. However, this practice has become nearly impossible today. The value of cash has declined, and even the largest banknotes now have significantly lower purchasing power. Carrying millions in cash for a property or vehicle transaction is no longer practical or secure.
Digital Money and the Rise of Alternatives
In today’s world, significant transactions using cash are almost obsolete. Bank transfers have become the standard for large sums, as technological advancements make digital money transfers essential. This shift has also enabled stricter tax monitoring.
So, how can unnecessary taxes be avoided in such a system? For example, if you sell a waterfront mansion, a factory, or a ship, how will the money change hands? Even strong currencies like the dollar or euro are rarely used in cash transactions anymore. In fact, in some countries, cash usage has nearly disappeared, with even the simplest payments now made via credit or bank cards.
This shift has also driven the rise of alternative solutions like cryptocurrency transactions. For instance, U.S. embargoes on oil and gas sales by countries like Russia and Iran have made traditional bank transfers nearly impossible, pushing these parties to explore digital currencies and other innovative money transfer methods.
A New Era of Tax Planning
This evolving landscape requires individuals and businesses to adopt more cautious and strategic approaches to tax planning. By staying within the legal framework, it is possible to reduce unnecessary tax burdens effectively. However, this demands a higher level of financial literacy and careful navigation of new financial systems.
While the digital age has made transactions more convenient, it has also increased the transparency of financial activities, making tax compliance more critical. Paying taxes remains a civic duty, but the rapid transformation of technology and global economics calls for a reassessment of tax policies. In this modern era, the most effective strategy for both individuals and institutions is to embrace legal and strategic tax planning to adapt to the new financial reality.