Science a GoGo's Home Page Forums General Discussion Not-Quite-Science Forum Money- too much or too little

Wyld wrote---


Lets say for this example I am a Farmer

I give 20 cows to person 2 and on the electronic system I get some Barter Units put against my name.

I can then use these barter credits to buy Hay from person 3, so my number of barter units on the electronic system is reduce and I never get some Hay.

Now because technically not dollars have passed back and forth, under the legislation of most countries I wouldn't have to pay tax on this barter.



This system is not barter, as barter is the act of exchanging goods without the use of money. Money is a medium of exchange. In this system barter credits are de facto money as they can be exchanged for goods. Dollars are not the only form of money on the planet. Of course you would have to pay tax on the barter credits in the same way that tax is paid on non-monetary components of salary such as cars, holidays and lunches etc. Actually I would bet that any taxing institution would jumping on the fact that barter credits are really monetary units straight away.

Bartering is the direct swapping of the cows for the hay.