::  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:

Circumferential Lines and Express Service

In a number of large cities with both radial and circumferential urban rail service, there is a curious observation: there is express service on the radial lines, but not the circumferential ones. These cities include New York, Paris, and Berlin, and to s…

via Pedestrian Observations September 15, 2019

Reframing the evolutionary benefit of sex

From the perspective of an organism trying to propagate its genes, sex is like a trade: I’ll put half of your DNA in my offspring if you put half of my DNA in yours. I still pass one copy of my genes onto the next generation per unit of investment in chil…

via The sideways view September 14, 2019

Bear store

A preschool game that’s been particularly popular and versatile with my kids. Materials: Pennies Collection of counting bears or any other small objects One person is the storekeeper and sets out the bears in any way they want. The other people are custom…

via The whole sky September 9, 2019

more     (via openring)

More Posts:


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