The Cashless Dividend

Over a decade ago, while working on a telecommunications project in The Hague, I noticed something about Dutch residential streets that I have never been able to set aside. Every evening, the walk home offered the same arresting sight: enormous ground-floor windows, fully uncovered, glowing with warm light. Families eating dinner in full view. Children doing homework at the kitchen table. No curtains. No blinds. No apparent concern that a stranger was passing two meters from their living room. When I asked a Dutch colleague about it, he shrugged — as though the question had never occurred to him.

The explanation runs centuries deep. The tradition dates to the Dutch Golden Age, when Calvinist Protestant values were woven into the culture of the Netherlands. A good citizen has nothing to hide, and therefore hides nothing.¹ Closing your curtains during daylight invited suspicion. What, exactly, were you concealing?²

I think about those windows often now, because the world is in the middle of a transition that asks a version of the same question — not of households, but of entire economies. The shift from cash to digital payments is accelerating across the globe, and the case for speeding it up is stronger than most people realize. Not because digital is more convenient, though it is. Because cash — anonymous, untraceable, unaccountable — has become the infrastructure on which tax evasion and the dark economy depend.

The IRS projects a gross federal tax gap of $696 billion for tax year 2022 — the difference between what Americans owe in taxes and what they actually pay.³ That figure alone should alarm anyone who pays what they owe. But the composition of the gap is what makes it an indictment.

Where income is subject to withholding — wages reported on a W-2 — only about one per cent goes unreported. Where income has little or no third-party reporting — sole proprietorships, cash-intensive businesses, informal gig work — roughly fifty-five per cent goes unreported.⁴ The U.S. Treasury has described this as a system with "two sets of rules" — one for people whose employers report every dollar, and another for those whose income moves through channels the government cannot easily see.⁵

This is not a loophole. It is a subsidy — paid by every honest worker in America to every tax evader who deals in cash. Every dollar that goes uncollected must be compensated somewhere: through higher rates on compliant taxpayers, fewer public services, or more borrowing. The hourly employee, the salaried professional, anyone whose paycheck flows through a system that reports every cent — these are the people funding the gap. They are subsidizing, involuntarily and invisibly, the opacity that cash provides.

And tax evasion is only the visible surface. Cash is also the medium through which the dark economy operates — money laundering, unreported labor, under-the-table arrangements that evade not only taxation but labor protections, insurance requirements, and the regulatory frameworks meant to keep workers and consumers safe. Every transaction that leaves no record is a transaction that no law can reach.

A cashless economy does not eliminate all of this. But it shrinks the space in which it can operate, because every digital transaction leaves a trail. A broader, more visible economy means the same tax revenue can be collected at lower rates — and that the burden shifts from those who have no choice but to comply toward those who have, until now, chosen otherwise.

The global momentum is already unmistakable. In Norway, cash accounts for barely two per cent of retail transactions.⁶ In South Korea, more than half of all bank branches had by 2020 stopped handling cash altogether.⁷ Sweden, the country that gave Europe its first banknotes, now conducts fewer than ten per cent of in-store purchases in cash — and the Netherlands, Finland, and Denmark are not far behind.⁸ These are not countries retreating from freedom. They are countries that decided transparency is worth building toward.

Which brings me to Guam. A U.S. territory of roughly 154,000 people, with a median household income of $58,289 — comparable to several mainland states. But one in five residents lives in poverty. A comparable share of households depends on federal nutrition assistance.⁹ The cost of living is inflated by the Jones Act, which restricts shipping to U.S.-flagged vessels and raises the price of virtually everything that arrives by sea.¹⁰ If any community stands to benefit from a fairer tax base and a more transparent local economy, it is this one.

And the preconditions are already in place. According to the 2020 Census, 92.3 per cent of Guam's households own a smartphone, and 85.9 per cent have broadband internet.¹¹ The island does not need to build a digital infrastructure from scratch. It needs to decide to use the one it already has.

The usual objection to accelerating the cashless transition is that it leaves vulnerable populations behind — the elderly, the unbanked, the technologically disconnected. It is a legitimate concern, and it has a straightforward answer: solve it. Guarantee every resident a no-fee bank account, as India's Jan Dhan Yojana program has done for more than 530 million people.¹² Subsidize basic smartphones for the small percentage of households that lack them, the way the FCC's Lifeline program already subsidizes phone service.¹³ Upgrade the territorial ID card with contactless-payment capability so that it can receive government benefits and function at any register — the way transit cards work in Tokyo and the federal Direct Express card already delivers payments to millions of Americans.¹⁴ Structured as a debit instrument rather than a credit product, such a card would carry significantly lower transaction fees — and a territory-wide processing agreement could reduce those costs further still.¹⁵

These are not expensive propositions. They are the cost of removing the last credible objection to a transition that is long overdue. Once every resident has access to the digital economy, the argument for preserving cash as a primary medium of exchange collapses — and what remains is a simple question of whom the current system actually serves.

Those who resist financial transparency most vocally tend to be those with the most to gain from opacity. The Dutch understood this four centuries ago. The people who close the curtains are rarely the ones with nothing to hide.

I keep returning to those windows in The Hague — the way an entire society decided that openness was not a vulnerability but a strength. A cashless economy is that kind of open window. The longer we wait to build it, the longer we ask honest people to subsidize those who operate in the dark.