The U.S. Govt has the power to regulate the internet and cryptocurrency

Continuing the discussion from Is the Internet a Post Road?:

I’m not sure what your point was here. The U.S. has clear authority to “keep people from using the form of money known as cryptocurrency”, because of the commerce clause. And the U.S. has clear authority to shut down all internet financial transactions that cross state lines, in favor of its own system, such as the ACH Network.

And the U.S. not only has authority to, but actually does require every business in the country to use its own website to pay taxes (exception if you don’t have internet availability in your area). 26 U.S.C. 6302(h)

~Max

None of this makes any sense.

Of course people can use any form of private currency in private transactions. It’s called scrip currency and has been around in various forms since the beginning of the country. How is cryptocurrency any different in principle from barter, which is recognized even by the IRS as a legitimate form of transactional payment? As for interstate commerce, I cite Disney Dollars.

Neither the ACH Network nor the National Automated Clearing House Association which runs it are governmental institutions.

And while the U.S. can obviously control what currencies it accepts for its own purposes, that’s the opposite of the question being raised, i.e. whether the government can ban others. Many entities, like states, cities, and counties, have the power of taxation and the federal government has no control over them and cannot ban them in any way. I suppose that somehow a tax could be unconstitutional but that’s a matter for a court to decide, not Congress.

I know there’s a rolleyes smiley hidden somewhere, so just assume I added it.

I think the OP’s point is that the government has the power to prohibit script currency not that they currently use that power.

On that point, I agree with the OP. But I don’t think it would be the commerce clause that would be invoked. The money clause seems to address this issue more directly.

The Congress shall have Power … To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures.

However, I can see where some people might disagree. Some might argue that Congress only has the power to regulate the money that it issued and cannot regulate money issued by private entities. I feel that the text means that Congress has both the power to issue money and the power to regulate money.

In defense of this position I will note that the National Bank Act of 1866 placed a high tax on currency issued by private banks in order to pressure banks into discontinuing these private currencies and switch over to government issued currency.

I would be interested, in a morbid-curiosity sort of way, to learn how you get “required to use a government website” from this:

(2) Definitions
For purposes of this subsection—

(A) Depository tax

The term “depository tax” means any tax if the Secretary is authorized to require deposits of such tax.

(B) Electronic fund transfer

The term “electronic fund transfer” means any transfer of funds, other than a transaction originated by check, draft, or similar paper instrument, which is initiated through an electronic terminal, telephonic instrument, or computer or magnetic tape so as to order, instruct, or authorize a financial institution or other financial intermediary to debit or credit an account.

Doesn’t that immediately tell you that the government resorted to a tax because it didn’t have the power to ban private bank currencies?

Probably. But imagine if every bitcoin transaction was formally subject to a 10% tax. Enforcement could be a problem of course.

Imagine if every ton of carbon emissions was subject to a 10% tax. Might make a dent those dozens of fires burning down the west.

The government always has had the power to tax undesirable products out of existence. The Marihuana Act of 1937 was actually a Tax Act, with the tax intended to push hemp out of the paper pulp market. Marijuana was a side effect. They could have added marijuana to the Harrison Narcotics Tax Act of 1914.

None of those acts or the hundreds of similar ones were legally the same as bans.

Sure. In 1866. But since the 1930s the scope of the commerce clause has been increased dramatically with the blessing of the courts. If Congress passed a law that banned private bank currencies, I think it would be indisputable that such a law would be valid as would the laws mentioned in the OP.

The powers under the commerce clause are vast, and although many of us complain that it goes too far (e.g. the feds can ban home grown marijuana because of the effect that has on the interstate marijuana market–even though they don’t want an interstate market in marijuana at all) these laws are right up the alleyway of a regulation of commerce.

Exactly. For example, the civil rights act relies on the commerce clause (!) to protect customers from Greensboro-style racial discrimination. Only ‘private clubs’ and very very small town businesses (with little to no out of state customers) are exempt.

Anywhere the federal government can force a business to accept black customers, Congress has the power to ban the use of scrips, cryptocurrency, even internet.

~Max

Paragraph (h)(1)(A), which you did not reproduce,

The Secretary shall prescribe such regulations as may be necessary for the development and implementation of an electronic fund transfer system which is required to be used for the collection of depository taxes.

Browse through the rules prescribed by the secretary of the Treasury and you will find this,

26 CFR 31.6302-1(h)

Time and manner of deposit—deposits required to be made by electronic funds transfer—(1) In general. Section 6302(h) requires the Secretary to prescribe such regulations as may be necessary for the development and implementation of an electronic funds transfer system to be used for the collection of the depository taxes as described in paragraph (h)(3) of this section. Section 6302(h)(2) provides a phase-in schedule that sets forth escalating minimum percentages of those depository taxes to be deposited by electronic funds transfer. This paragraph (h) prescribes the rules necessary for implementing an electronic funds transfer system for collection of depository taxes and for effecting an orderly and expeditious phase-in of that system.
[…]
(3) Taxes required to be deposited by electronic funds transfer. The requirement to deposit by electronic funds transfer under paragraph (h)(2) of this section applies to all the taxes required to be deposited under §§1.6302-1, 1.6302-2, and 1.6302-3 of this chapter; §§31.6302-1, 31.6302-2, 31.6302-3, 31.6302-4, and 31.6302(c)-3; and §40.6302(c)-1 of this chapter.

Section 2, which I did not quote here, provides rules for the gradual phase-in of required electronic tax deposits from the 90s.


ETA: To directly answer your question, it turns out businesses are not required to use the eftps website. But we are required to pay by “electronic funds transfer”, and the government decides the methods of electronic funds transfer which are allowed. Section (h)(4) of the above cited CFR links to this document which gives details on the electronic federal tax payment system (EFTPS) businesses are required to use:

(An automated phone system is available in addition to the website)


~Max

Words do not mean what you want them to mean. They mean what they are defined to mean.

It apparently somehow escaped your notice that I quoted the definition of “electronic fund transfer.” Nowhere in that definition is there any hint that a specific website must be used to initiate the process. On the contrary, there is a great deal of latitude.

Nor will you find what you are looking for in the section you quoted. That section clearly points to the regulations for details, not the law.

Section (h)(1)(A) of the law mentions that an “electronic fund transfer system” is required for collection of depository taxes, and it is (h)(1)(A) which forms the statutory basis by which businesses are required to use EFTPS.

~Max

You can also search the web for sources, EFTPS became mandatory for corporations nationwide in 2011.

https://www.cspcpa.com/2010/12/30/eftps-mandatory-on-january-1-2011/#:~:text=Electronic%20Federal%20Tax%20Payment%20System,no%20longer%20maintain%20that%20system.

https://www.duanemorris.com/alerts/IRS_private_foundation_electronic_federal_tax_payment_system_EFTPS_3906.html

~Max

It can probably do that if it is able to ensure more regulations for Wall Street.

“The power to tax involves the power to destroy.” Chief Justice Marshall wrote that in 1819.

And Lincoln recognized this. The tax on private currency was intended to drive it out of the market so the new government currency would replace it.

IOW, “the government resorted to a tax because it didn’t have the power to ban private bank currencies.”

You didn’t acknowledge my comment above. The govern indisputably has the power under the commerce clause to ban private bank currencies. Not a judge in this country would rule that it does not have that power. Not a single legal scholar in this country would believe that Congress does not have the power.

Think of marijuana. The government originally imposed a punitive tax on it to try to prohibit marijuana because it previously did not believe it had the power to ban it. By 1970, it realized/assumed the power under the commerce clause to outright ban it without resorting to the fiction of a tax.

No, the government used a tax as the means to ban private bank currencies.

As I noted, they were open about this. The tax was not designed to collect any significant revenue. They were using it to eliminate private currency.

Your argument above basically comes down to “the commerce clause allows Congress to do anything.” I don’t believe this is true.

I completely agree that the trend toward giving Congress power under the clause has accelerated in recent decades. However, that tendency is at best asymptotic: it has not reached completeness nor is it likely to ever do so.

We’re arguing over semantics. The government acted then as later as if it did not have the power and so resorted to other means.

Does the government act today as if it has the power to ban virtually anything? Not at all. The rest is the province of law journals and moot courts.

I agree. But we’re talking about money, something which the Constitution explicitly gives Congress authority over.