Topic: 2013-06-11 QZ.com - How digital currencies democratize tax evasion (Read 2099 times)

There's a term used by economists that has been largely forgotten about in regards to this when a government is on the brink of collapse: "Capital Flight"

It's not tax evasion ( wrong term for this anyway ) or even tax avoidance, people are just taking their money and running because they know the end is near, it's like when animals are running away all at once, the only reason they'd do that is if there's an impending disaster.

Thats nothing, it gets worse, now they want to tax the money itself for being exchanged.

Anywhere in the world when money is converted from one form to another it is an exchange not a sale, or an investment. For example when converting $100 US to Mexican pesos, the agency converting does not identify you and in exchange you get pesos with a 2% to 4%  fee for the convertion.

Why is the gov treating Bitcoin differently? It is due a war against the Bitcoin.

Let say you pay a 25% income tax to keep things simple.

A $100 of gross, will be $75 US of net, so if that $75 is taken and converted to pesos you did not have to ID yourself, and lost about 3%, so now you have $72.75 in dollar equivalent in pesos, now you exchange the pesos to dollars, those pesos and loose another 3% so now you have $70.56 in dollars.

Now in Bitcoins, using government logic:
A $100 of gross, will be $75 US of net, so if that $75 is taken and converted to Bitcoin, exchanges charge 1/2% for bitcoin, so you now have $74.63 equivalent in BTC, now you exchange the Bitcoins for dollars  another 1/2% fee so you now have $74.25 but here comes the problem, according to the gov you just had an income of $74.25 which will be taxes at 25%, so you really have $55.68.

Now the big questions is why pesos when exchanged are not paying income tax and Bitcoins are, and when exchanging pesos do not need to ID yourself, and with Bitcoins you do.

It is a clear war against Bitcoin, avoid the double tax, money which already paid taxes should not be taxed anymore.

Conclusion rules that apply to Bitcoin do not apply to the Mexican pesos use in the USA southern border towns, and it is probably the same for the northern us border for the Canadian dollar.

muahahahah!!!

Let me count the ways: they taxed the wool, they taxed the loom that made the yarn, they taxed the dye, they taxed the needles, they taxed the buttons (if any), they taxed the pattern if you bought one, they taxed the chair you sat in while you knitted, they taxed the shoes you wore to take the sweater to your neighbor, they taxed the seed that made the lawn you walked on to get to your neighbour's house, they will tax whatever you buy with the money your neighbor pays you for the sweater....     

Once you leave, your neighbor will turn you in as a suspected tax cheat in order to get a reward.         

Ok lets make it property tax only  (including stocks)
And after that we can save the zillions of dollars spent on tax legislation, tax trials, tax enforcement agencies, tax-accountants and improductive hours of tax discussions, tax evading thoughts and many units of unfairness

how do you ensure every product is taxed? if I knit a sweater and sell to my neighbor how does that get taxed

What a clever title.

I love it.

Just tax everyone with VAT and property tax. Then you can stop invading people's privacy to get your mooooooooooonnnnnnnnnnnnnney.

And hopefully not spend it on pointless wars and things like that.

How digital currencies democratize tax evasion
by Tim Fernholz


 - http://qz.com/92842/how-digital-currencies-democratize-tax-evasion