Economy
In reply to the discussion: STOCK MARKET WATCH -- Friday, 7 December 2012 [View all]Demeter
(85,373 posts)Last month, I criticized the well meaning but naive strategy of the Occupy Wall Street group Strike Debt for dealing with consumer debt, which is to buy severely discounted debt from debt collectors and forgive it. My main complaint was that there were more productive approaches, such as wider publicity and distribution of the Debt Resistors Operations Manual, providing more counseling and legal support to borrowers, and using debt purchases to develop cases against the debt sellers. By contrast, the Rolling Jubilee increases the profitability of bad system by providing more revenues to the incumbents, while the debt purchases are unlikely to do more than help a few random people. It might make for feel-good PR, but it wont make a dent in the problem.
Perversely the post got pushback on the last (and by implication, the least important) issue raised, namely, that of possible tax problems with the scheme. I wanted to revisit this issue and demonstrate why the responses of allies and members of Strike Debt have failed to put the issue to rest, and more important, why this matters.
The short version is that Strike Debt maintains that there is no risk here, when as we will demonstrate, the outcome is not knowable at this juncture (yes, that is unsatisfying, but welcome to the world of tax). Its possible that things will work out just fine for the Rolling Jubilee. But if not, the ramifications to Strike Debt and the borrowers whose debt was cancelled would be significant. Thus, to dismiss this very real possibility is irresponsible.
Tax issues are nerdy. You need to be prepared to read this entire post, carefully. Go get some coffee or a cola. Im planning to box readers about the ears if they raise issues that were addressed in the post...
SO, READ ON
http://www.alternet.org/economy/why-occupy-wall-streets-rolling-jubilee-puts-borrowers-risk?akid=9762.227380.riyBoM&rd=1&src=newsletter755977&t=11&paging=off