Last night’s Rolling Jubilee fundraising event was a success, raising enough money to abolish about $5.5 million worth of debt. (I threw $10 into the Jubilee hat, or enough to forgive $200 of someone’s debt.)
As Felix Salmon explains, there will be no tax repercussions after the debt is forgiven because none of it will be reported to the IRS (the tax code shows that canceled debt is not considered income when the forgiven debt is considered a gift). Salmon also says that although the banks won’t be hurt by any of the debt forgiveness in any way, it “feels great to have the opportunity to be an anti-bank for once.”
Over at the Daily Intel, Paul Ford wonders if the Rolling Jubilee will be able to scale, and if it will convince the IRS to change its positon on forgiven debt as a gift, or if it will drive up the price of distressed debt from pennies on the dollar to dimes or quarters on the dollar (which I doubt, since collection agencies have been buying this sort of distressed debt in larger quantities for quite some time already). In any case, I’m looking forward to seeing where this goes.