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Discussing time banking and taxation: no Euro Taxation but Complementary Taxation ?

photo of Michel Bauwens

Michel Bauwens
21st July 2013


“Instead of euro taxes then, a complementary tax as a timetax can be further strengthening the workings of the timebank, and further contribute to a strenghtening of participation in civil society, the cooperative economy, and a democratising of the public sphere … In the Helsinki timebank, members choose to which ethical actor in the timebank they put their small 2% tax which goes from each hour exchanged”. – Ruby van der Wekken*.

Excerpted from Ruby van der Wekken:

(reporting from the second international complementary currency conference took place in The Hague, Holland, June 19-23; the original article has many links)

“With regards to Timebanking and taxes, in Holland I gained more confirmation that it is very important for us to keep up front what the potential of Timebanking is, and can be in the future: both with regards to its objective as set in Helsinki Timebank of enabling mutual assistance between people, and through this a strengthening of communal culture, as well as with regards to the strengthening of a social and ecological just local economy, in which everyone is of equal value and has equal participation possibilities. We should thus be avoiding that the tax discussion will be leading to a definition of timebanking which only partly reflects our aspirations, and which risks limiting our possibility to use timebanking according to the total of those aspirations in the future. Also, what elsewhere has been happening is good to learn from and keep in mind.
Two further issues were in particular confirmed in Holland with regards to Aikapankki and taxation:

First of all, Timebanks should not be euro taxed. This we already know and firmly believe in, in Finland and in the rest of the world. This being said, different countries have come to different agreements around Timebanking, with the timebanks themselves having different ongoing discussions and negotiations around the issue. Whilst we generally are told that timebanks are not taxable in for instance the United States, this is not a 100% closed discussion as such. A timebank like the wonderful Dane County Timebank , has been developing a mutual aid network including also a feature as crowdfunding, which also in part is an answer to not all work being able to be done in the timebank.

Timebanks can also be defined by the proposal that after a certain amount of euro’s of exchange, timebank activity is taxable. This is forinstance the agreement in Holland. The plateau is set at 3.000 euro, and after that have to show that no professional work has been done. One hour work is set at 4,5 euro. Stadin Aikapankki has in its ABC , that aikapankki’s working cannot now nor ever be valued in money. Part of the reasoning behind that is that we do not want to be justifying social spending cuts. There are other reasons, like that it goes straight against the core of aikapankki’s principles.

In Britain there is tax exemption for timebanking defined as volunteers work, or charity. Timebanking can in Britain be attached to a generous amount of funding. I listened at the conference to researchers telling about the birth of a “social care industry” in Britain, which not necessarily works, not necessarily realises what people are wanting for, not necessarily is empowering, and which, rather contrary to the spirit of Timebanking, can lead to considerable competition for funds. So, whilst the starting point for sure has been good, the idea that timebankings potential can be better fulfilled via funded projects, not necessarily has turned out to be true. These considerations have also been present in the development of Stadin Aikapankki.

All these agreements and related issues are of course related to a countries history, state and laws. On a European level a lot is happening, and new laws are upcoming.

What I am perhaps mostly trying to convey with these examples, is that the conference brought to the forefront how world wide there is an ongoing search which acknowledges that new ways of doing things, a paradigm shift challenging notions of competition and scarcity is being explored with community currencies including also timebanking – as reflected among other in the discussions of the Commons (see Commons.fi) and Solidarity economy building. And as has been commented to me also in Finland, we might just simply have to understand that existing laws will have to be changed – to be keeping up with reality, we could add.

Secondly, The potential of Complementary community currencies is not strengthened by euro taxation, but by complementary taxes. This is an entire own field of discussion. For instance, at the conference I learned that the Brixton pound can have taxes payed in Brixton pounds, however – Brixton pound taxes are first of all exchanged by a clearing house company into Sterling pound. And that tax money will currently not be reverted back into Brixton pounds to be used in the local economy, due to the contract with the clearing house company, even if that is something Brixton pound movement would certainly want. This is something that is being worked on.

I also took the opportunity to talk more on the issue of Stadin Aikapankki’s internal Timetax , which was developed partly in response to the discussion on aikapankki and taxes, yet also, because of the potential it offers to through the timebank further develop the supporting and building together of common objectives.

It was interesting to hear from Bernard Lietaer on his proposal of the Civics in which citizens pay Civics as a local tax, which is earned by citizens working in different communal projects decided upon democratically, and which as such has resonating elements with Stadin Aikapankki’s ‘Tovivero’ in its democratising of the public sphere. Lietaer was of the opinion that initiatives like these are most worthy of being a given a trial period in a given location, in order to further assess and develop their potential.

Someone commented at the conference that a timetax could be significant for the whole timebank movement, taking timebanking to a next level – innovation if you like. This discussion ofcourse resonates with ideas of co-production and of as Michel Bauwens has described a partnering state, which supports co-production by providing civic infrastructure whilst guaranteeing the basics for all.

Finland’s welfare state’s history, the existing political willingness to be strengthening the cooperative economy, the statement issued in Helsinki’s Global Responsibility Strategy ”In light of social cohesion, citizens selfdetermination, and economic sustainability, the city will be exploring how it can support timebankin’s activities” acknowledging so well the different dimensions to the potential of a community currency as aikapankki – is keeping up faith that conditions in Finland are existing to allow for a progressive development of timebanking in Finnish society, both as an enabler of mutual assistance between people, as a strengthener of civil society, and as a strengthener of a social and ecological just local economy, which has important local, yet also global ramifications. This is what I hope for timebanking in Finland.

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