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REVIEW of Money 26
The Barter System
trading goods and services instead of using money

We live in a world where money rules. Although the old days of trading or swapping goods as a routine practice has pretty much gone, there are plenty of occasions when the barter system is alive and well. I'm not talking about haggling to get prices down. This article deals with the exchange of goods or services between individuals and companies that side-steps actual money. It may be considered fair for a brick-layer to build a garden wall for an accountant who, instead of paying for it in cash, prepares the bricky's tax return for free. Both parties are happy with the deal; but there is someone out there who is far from pleased; and he can get very cranky if he misses out on his piece of the action. That's the Taxman.

We all know that taxes are necessary to keep the country afloat; but, we reason, what difference is the odd bit of bartering going to make? Actually much more than is realised. Millions are lost to this kind of trading because, when no money changes hands, the taxman gets nothing. And coming up short means loading other areas to compensate - sales tax, GST, VAT, HST, PST, you name it. And if that doesn't work, support for health, education and other essential services is reduced; and we all suffer the consequences.

By declaring those barter deals and paying the required tax on them may leave the bank balance somewhat depleted, but we are helping ourselves in the long run. And bear in mind: should the taxman discover anyone not doing the right thing, he will dish out more than a slap on the wrist!

To read the complete article or download the PDF of Money 26 click here

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