The Daily Deduction

Income Tax Popcorn – The Shiny Pieces of Eight Edition

 estblog - Talk like a Pirate

Ahoy, Matey!  In honor of International Talk Like a Pirate Day, our band of pirate culture enthusiasts at eSmart Tax compiled this entertaining collection of facts on pirates throughout tax history:

Ever since the oceans were used for commerce, pirates have existed.  Though customary international law defines piracy as robbery and criminal violence committed in the air, on land, and at sea, the most well-known pirates throughout popular culture made their impacts on history while sailing the high seas.

It’s common knowledge that pirates of yore didn’t own bank accounts or pay any taxes. Did you know that the term “pirate banks” has recently emerged to define the offshore banks that criminals put funds into to commit tax evasion?

In the 18th Century, Privateers from Marathas attacked British ships on their way through the Arabian Sea.  The pirates demanded that the British Ships from the East India Company pay a tax to use the waterway.

According to the IRS, ransom plundered by pirates qualifies as theft.  Like blackmail, embezzlement, and extortion, losses reported as a result of pirate activity are tax deductible.

Pirates had a ranking system among their crew members to determine how the rewards from the plunder were divided up.  Contrary to popular belief, medical supplies, food, and other necessities for living had the most value.  Some crew members had to pay a “tax” on their share of the plunder to higher ranking members.

Just like today, the exchange rate of currency varied depending on where you traded your coin.  There was no common exchange rate between countries and colonies.  The common Spanish “pieces of eight” could have been worth anywhere between $200 - $500 in modern currency.  Some of the highest valued plunder

The definition of “piracy” has evolved to include the practice of manufacturing, distributing, or selling copyrighted media over the internet.  The French government once investigated the benefits of imposing taxes on search engine companies to encourage private regulation of access to downloadable copyrighted content.  A technology in Germany has threatened to impose higher prices and tax hikes on digital media and storage devices to offset losses caused by piracy.

 

[Sources:  The Museum of the Albemarle Tour 

Nonbusiness Casualty and Theft Losses - IRS.gov  

Can You Deduct a Pirate Ransom? – Forbes.com 

History of Piracy – Pirate Shipwrecks 

Wealthy Stash $21 Trillion in ‘Pirate’ Banks – Yahoo! Finance 

Germany Increases ‘You Are All Pirates’ Tax on Solid State Media By 2000% - Techdirt]

--

Arrrr!  Frustrated by taxes?  The eSmart Tax team is here to help.

 

 

Posted To: The Daily Deduction By: Lauryn on 9/19/2012 05:00:00 PM
blog comments powered by Disqus
  • Connect with us on Facebook
  • Follow us on twitter
  • Connect with us on Tumblr
  • Connect with us on You Tube