::  Posts  ::  RSS  ::  ◂◂RSS  ::  Contact

Everything is Barter

December 18th, 2017
taxes  [html]
If you drive me to the airport and I give you money, that's taxable. Or if we agree that I'll babysit your kids in exchange for the ride, that's taxable as well, being barter. [1] On the other hand, if you give me a ride to be helpful, and then later I watch your kids as a favor, I think that's not taxable. But I don't see how to draw the line here: instead of transacting in money or direct barter we're transacting in favors or social capital.

In some cases I think it may come down to whether we make an explicit agreement vs doing things informally. If I let a friend live with me because I have a spare room, and then they decide to spend weekends fixing up the house out of gratitude, I think that's not taxed. But if we explicitly agree that I will waive rent in exchange to 12hr/week of house repairs that probably is taxed. Penalizing people for being explicit in their interactions with each other seems harmful, though, as clarity in expectations can be a good way to reduce conflict.

Other things seem even messier. What if I take a job that pays less because I value the experience I'm gaining. What if it's for the fun? Prestige? Social impact? Or imagine I live in the US and want to donate to a charity that's tax-deductible in another country, and you vice-versa, so we each agree to donate to the other's charity. Or I agree to give up eating pigs in exchange to your giving up eating eggs. Is any of this taxable? Should it be?

Mostly I'm just pretty confused. I think it's possible that lots of things are technically taxable but most people don't report them and the IRS doesn't really expect them to be reported?

[1] Barter in the US is taxed as if we had each performed our services for "fair market value" in money. So if $50 would have been a fair price for the ride and for the babysitting, we each report an additional $50 of income.

Comment via: google plus, facebook

Recent posts on blogs I like:

Hedonic asymmetries

Creating really good outcomes for humanity seems hard. We get bored. If we don’t get bored, we still don’t like the idea of joy without variety. And joyful experiences only seems good if they are real and meaningful (in some sense we can’t easily pin down…

via The sideways view January 26, 2020

Live the questions now

Here’s some advice that my Godmother, Lynne Caldwell, gave me a few years ago. I found it again the other day and it struck me that at least I understand its wisdom now. She really did get my problem. It feels like he’s speaking directly to me. It’s from …

via Holly Elmore January 23, 2020

International Links: a Revision

In 2011, I wrote a post arguing that international links underperform. I gave examples, using many links nearly all of which have rotted in the 8.5 years since, showing that the ridership on various air and rail city pairs was lower if they were in two di…

via Pedestrian Observations January 22, 2020

more     (via openring)

More Posts:


  ::  Posts  ::  RSS  ::  ◂◂RSS  ::  Contact