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        REA-12          Taxes.                         January 8th,  1986




                            Taxes.


        It is true that LETSystems could be used to evade taxation.

        However, only the most foolish would dismiss the fact that any 
        large scale LETSystem will have records as accessible if not more 
        so than those of conventional banks and other clearing houses.

        LETSystems registered with Landsman are required to maintain a 
        fully legitimate operation, and must clearly advise their members 
        of the tax (and other) obligations they might incur.



        It should be observed that almost all tax evasion is done in 
        conventional currency.

        Is this a good enough reason to argue against its use ?



        The use of personal money can in no way be interpreted as a 
        conflict with normal constitutional arrangements.

        Indeed, many who are currently unable, and perhaps unwilling, to 
        contribute to the upkeep of the state will be far better able to 
        do their share if the LETSystem provides them with a means to 
        earn a living.

        In addition to supporting revenues to governing bodies, 
        LETSystems will diminish the level of transfer payments currently 
        necessary to maintain the viability of the community.

        There will be significant reduction of welfare roles and UIC 
        claims, many job creation schemes will become unnecessary, and 
        some of the burden on social services will be relieved.



        Landsman will continue to invite all levels of government to 
        consider the advantages to all concerned that will derive from 
        tax regulations that enable taxes incurred through green dollars 
        to be paid in green dollars.



        Our reading of the current regulations of the Unemployment 
        Insurance Commission seem to suggest that no distinction can be 
        made between conventional and green earnings.

        Hence green earnings may reduce entitlement in a UIC claim, and 
        should be reported.

        Equally, green earnings are insurable under the same conditions 
        as cash earnings and may thus generate entitlement.


        Landsman Community Services Ltd.              REA-12    Page    1


        REA-12          Taxes.                         January 8th,  1986



        We hope that it will be quickly recognised that LETSystems 
        provide the opportunity for all to work as they wish, and thus 
        represent a major alternative to the current dependency of many 
        upon the UIC program.

        This suggests that it would be good policy to dissociate green 
        dollars entirely from all UIC procedures.



        It is a typical provision of welfare and other social assistance 
        programs that earnings automatically reduce entitlement.

        The consequence of this provision is the so-called Poverty Trap.

        Green dollars offer an opportunity for government to help people 
        out of this trap without being stuck with the expense.

        For some time, green dollars will be only partially applicable to 
        expenditure on those necessities that welfare programs are 
        intended to assure.

        Hence earnings in green should only reduce entitlement to the 
        extent that actual expenditure on those necessities is possible.

        This will allow people to increase their earnings, their well-
        being and self respect, without an equal loss of support.



        It is likely, in most circumstances, that such concessions will 
        need to be won.

        Those who are given the heavy responsibility of supporting those 
        in need have often acquired a reputation for insensitivity, 
        arrogance and limited imagination.

        If a battle is indeed necessary, the field must be carefully 
        chosen.

        It is probably preferable that these issues are approached in 
        communities where strong support already exists amongst 
        claimants, and media coverage is likely.



        All these matters are concerned with the relationship between the 
        person and the state, and particularly address decentralization 
        of authority.

        Each aspect has differing significance at the federal, provincial 
        and local level of government.

        The interplay of the various interests will provide political 
        theatre of the highest degree.




        Landsman Community Services Ltd.              REA-12    Page    2