Answered by Philip Naudus on Feb 5th, 2020

In 1951, the government of Taiwan instituted measures to curb tax evasion that proved so effective that the total amount of tax collected in 1951 was almost three times the amount collected in 1950.

But before I explain how Taiwan did this, let’s talk a little about how tax evasion works.

One common method used to evade taxes is underreporting income, and then hiding the “extra” cash through money laundering or offshore accounts. But if the government knew about every transaction, it would know whether income was being reported accurately, and tax evasion would be much more difficult.

So, what if the government had consumers report their expenses? Suppose John buys a widget from Sam for $500. If Sam reports an income of $100 from the transaction (and hides the remaining $400) but John reports that the widget costed $500, the government knows that something’s wrong.

While this works in theory, there are two main problems:

1. Consumers don’t typically keep meticulous records of their spending.
2. The amount of paperwork required to evaluate every single transaction in the country would be overwhelming.

So, what if we tried a simplified approach? Suppose the government asked every consumer to furnish three random receipts per year. The taxation bureau will examine the furnished receipts and compare them to how the company reported those transactions. If the amount printed on just one receipt differs from the income the company reported from that transaction, the government will assume that the company underreported many more transactions… and stiff fines will follow.

“This is all very nice,” you might be thinking, “But what if companies deliberately print receipts incorrectly?”

Then, consumers have the right to demand a refund equal to the amount underreported.

“But what if companies simply don’t furnish receipts?”

Then, it becomes even more obvious that tax is being evaded. If an undercover agent buys something from a store and is not given a receipt, the company is fined.

“But what if consumers don’t keep their receipts?”

Ah, this is where it gets interesting.

In Taiwan, you’re given a special receipt every time you buy something.

Do you see the big number printed across the top? UF-32473705 is a unique number that identifies this transaction… and it’s also a lottery number.

Every other month, the government picks six random three-digit numbers. If any of the six match the last three digits of one of your receipts, you can turn in the receipt for a cash prize of NT$200 (US$7). Not extremely exciting… but I win the receipt lottery around three times per year. It’s just enough to convince me to keep saving my receipts in hopes that I just might win something small.

But there’s more.

Additionally, three random ten-digit numbers are chosen. If any of these numbers match one of your receipts, you can win NT$200,000 (US$6,700). I have friends who have won this prize more than once… but yours truly has terrible luck.

Finally, there’s also a NT$2,000,000 (US$67,000) prize and a NT$10,000,000 (US$300,000) prize. Last year, an “unclaimed $10 million prize” hit the news. They announced the place and date of the purchase… and everyone who shopped there that day tore through their pants pockets and sock drawers in search of that missing receipt.

Every time someone claims their prize, the government always checks whether that transaction was reported correctly. Businesses are now terrified of underreporting income because they don’t know which transaction will end up being audited.

It’s a brilliant system designed to put the burden of taxation on merchants. In theory, Taiwan can now cut personal income taxes because they receive hundreds of millions of dollars in added revenue from a system that only costs them tens of millions.

Although the government is still working on those tax cuts, I’m sure those who have won the $10 million prize are more than happy with this system.

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Answered by Sean Kernan on Jan 12th 2020

Mexico City is sinking several feet every year and it doesn’t appear to be getting better.

It’s caused by two things:

One: poor design and sourcing of water.

(Source: Mexico City, Parched and Sinking, Faces a Water Crisis. Kimmelman, Michael)

They continue drilling beneath the city for more water, doing this, they are depleting the water beneath the clay that the Aztecs originally built the city on, which causes the ground to drift further downwards.

They haven’t taken enough action to source water from a more long-term source. Until then, it will only continue their predicament and put them at risk of flooding.

Two: climate change. With increased fluctuations in weather and dry seasons, it is causing them to be more aggressive in pursuing water sources.

Mexico City also has a volcano next to it that is likely to erupt.

But who cares. A volcano never caused a problem for any cities.

(People who chose not to flee when mount Vesuvius went off by Pompeii met a 100km/hr blast of ashes)

But seriously.

Don’t fuck with volcanoes.

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