Last week an off­shoot of Occu­py Wall Street launched Rolling Jubilee, a new project billed as “a bailout for the 99%”. The project, which has been gen­er­at­ing con­sid­er­able inter­est in the finan­cial press, aims to help out ordi­nary Amer­i­cans by pur­chas­ing and abol­ish­ing their debt. It’s a nov­el idea:

Banks sell debt for pen­nies on the dol­lar on a shad­owy spec­u­la­tive mar­ket of debt buy­ers who then turn around and try to col­lect the full amount from debtors. The Rolling Jubilee inter­venes by buy­ing debt, keep­ing it out of the hands of col­lec­tors, and then abol­ish­ing it. We’re going into this mar­ket not to make a prof­it but to help each oth­er out and high­light how the preda­to­ry debt sys­tem affects our fam­i­lies and com­mu­ni­ties. Think of it as a bailout of the 99% by the 99%.

Rolling Jubilee will hold a for­mal launch event this Thurs­day at Le Pois­son Rouge. The event is already sold out, but will be livestreamed at rollingjubilee.org.

So far, over $143,000 has been raised to wipe out $2,871,186 in debt. If Rolling Jubilee can get to $1 mil­lion, it will be able to wipe out more than $20 mil­lion in debt, which would be no small feat. If it could some­how man­age to raise $10 mil­lion, it could the­o­ret­i­cal­ly can­cel $200 mil­lion in debt.

What’s real­ly strik­ing about this (no pun intend­ed) is that an indi­vid­ual con­tri­bu­tion goes a long way. For every $1 donat­ed, $20 of debt can be purchased.

Got $10 to spare? We’ll lib­er­ate some­one from $200 of debt.

Throw us twen­ty bucks and we’ll oblit­er­ate $400 of a strug­gling Amer­i­can’s debt. $100? We’ll take the weight of two thou­sand dol­lars off some­one’s back.

Many peo­ple have raised ques­tions about Rolling Jubilee, espe­cial­ly in regards to the tax impli­ca­tions of for­giv­ing debt (there’s an active com­ment thread about that over at Reuters’ site). Rolling Jubilee says it will earn no income from buy­ing and abol­ish­ing debt, so it will not have to file 1099‑C forms with the Inter­nal Rev­enue Ser­vice. We under­stand that Rolling Jubilee has received some coun­sel on this mat­ter from attor­neys who spe­cial­ize in tax prepa­ra­tion.

What about peo­ple who will ben­e­fit from the project?

Sup­pos­ed­ly, they’re cov­ered too. IRS Pub­li­ca­tion 4681 declares, “Gen­er­al­ly, you do not have income from can­celed debt if the can­cel­la­tion or for­give­ness of the debt is a gift.” And that is the busi­ness Rolling Jubilee is going into: Gift-giv­ing. Unlike mega­banks, Rolling Jubilee wants to abol­ish debt, not prof­it from it.

Rolling Jubilee may, how­ev­er, want to obtain a rul­ing from the Inter­nal Rev­enue Ser­vice affirm­ing that peo­ple whose debt is for­giv­en have received a gift and there­fore don’t have to pay tax­es on can­cel­la­tion of debt (COD) income.

What we find appeal­ing about Rolling Jubilee is that it turns finance on its head, much in the same way that the GNU Gen­er­al Pub­lic License (GPL) turns copy­right on its head. The GPL uses copy­right law to keep free soft­ware free, a con­cept known as copy­left. Users of free soft­ware are required to abide by the license: if they dis­trib­ute the soft­ware, they have to dis­trib­ute the source code. And if they dis­trib­ute mod­i­fi­ca­tions, they have to dis­trib­ute the mod­i­fied source code.

Rolling Jubilee is essen­tial­ly doing some­thing sim­i­lar. The project is tak­ing advan­tage of the fact that banks sell debt. RJ will legal­ly buy the debt, but instead of try­ing to col­lect the debt, it will can­cel it.

It’s a very pro­gres­sive, very uncon­ven­tion­al idea.

Rolling Jubilee aims to be trans­par­ent. The peo­ple behind the project want prospec­tive donors to know there will be almost no over­head at all:

All con­tri­bu­tions go to The Rolling Jubilee Fund, a non-prof­it 501(c) (4) orga­ni­za­tion with the exclu­sive mis­sion of buy­ing and abol­ish­ing debt. 100% of the mon­ey raised will go to the process of buy­ing and abol­ish­ing debt (a process that includes some asso­ci­at­ed costs such as paper­work, account­ing, and legal fees). The vol­un­teers man­ag­ing the fund receive no com­pen­sa­tion. In the inter­est of trans­paren­cy, a full account­ing of funds received and spent will be report­ed on our website.

If you’re inter­est­ed in par­tic­i­pat­ing in Rolling Jubilee, fol­low this link to learn more.