Topic: Biden Goes After Crypto Tax Evaders with Global Data Sharing Initiative (Read 311 times)

But that is the thing, a law like that is going to be almost impossible for anyone to comply especially if bitcoin becomes popular and when that is the case a great deal of people are not going to bother to do so, as I said this is an arms race and governments seem to think they can contain bitcoin when it was specifically designed to avoid them, they do not control the network and as long as that is the case any attempt to create those kind of controls will simply fail.

*has not contributed directly* We can say it is through the State's efforts that brought globalization to its citizens.

There's Value Added Tax (VAT) attached to the purchase/consumption but there are different types of taxes. What we're talking about here is taxing the income generated from using these mining equipments (CGT or Regular Income Tax). In this case, it's sold/moved BTC. These different taxes sounds like a double/triple burden but they are computed differently.

It is complex and the answer depends on one's interest and perspective.

The state's view on the value of cryptocurrencies evolved over time and we've witnessed that. They shrugged it off before because they see no value. They tax it now because they see real value. The same thing happened with other income-generating online activities.

You mean offshore? If so, I don't know about that. We have a bill awaiting our President's signature before it becomes a law that would tax Offshore gaming operators. So you see, tax laws changes too.

It's good that he is going to this tax evaders, the people who evade taxes don't use their money to help people so I would rather gamble on government collecting taxes to fund projects that will benefit the public.

I am not against this idea at all. If there is a tax to be paid then we should all pay it and if you are trying to not pay that or hide what you earn then you should be getting caught and forced to pay and even an extra penalty for trying to hide it.

What I am against is that companies are hiding their wealth all the time, from big corporations to just rich people there are tons of tax evasion going on in the world, just the other week there was a number like 7 trillion in few years or something for tax evasion, can you believe how much is that? And if we are not going after them as hard as we go after crypto tax evasion then I do not think that it would be fair. Stop all tax evasion and not just retail ones, they go after the little guy finally making some money but they do not do anything about the super wealthy people.

The problem with this plan is that Biden assumes that his administration is smarter than the previous one and he thinks that if he brings a few legislations in to effect, then all the tax evaders will simply come up and agree to pay the pending dues and penalties. That is not going to happen. Almost every Democrat president since the 1980s have attempted the same. And none of them have been successful. If he really wants to bring down the level of tax evasion, then the tax rates need to be lowered. Here he is going in the opposite direction by increasing the tax rates.

Covid hit it hard for most country and business isnt going back to normal until probably atleast 80% of the world population is vaccinated. So in order to generate money, one of the easiest way to do it is to increase taxes and its no longer a secret that most people have been trying to avoid tax by storing their money in crypto

With all those stimulus from Biden, its expected that this is going to happen. You cant keep on printing money out of thin air forever

Actually I thought it already worked this way. It's a fact governments are desperate for more income and crypto universe looks a pretty fertile spot to milk more money to the public vaults, so governments can keep the social welfare programs going on and increase their values when the elections are near again. Moreover, more money is needed to decrease the money printer's speed a little bit and make the fiat ponzi scheme last longer.
I'm sure not only USA, but many other countries will fully agree with his proposal, as all of them can be benefited. If it can lead to an one world global government I'm not sure, because China, Russia, USA and EU aren't going to bow themselves to each other. They value their own sovereignty and power applied over the weaker nations.

Universal minimum corporate tax was created to target multinational corporations such as Amazon and Microsoft. I don't think that it has anything to do with the cryptocurrency market. And I am quite skeptical about this initiative. The G7 has agreed to this and they will tax the corporations a minimum of 15%, in case the country where they are filing their taxes doesn't charge any corporate tax on the profits. It needs to be seen whether this measure can be defended in the court. For example, Americans are saying that they will charge 15% of the profits made by Amazon in Luxembourg, since the latter country doesn't charge any corporate tax. Now the question is how the US government can charge taxes on the sale that was done in Luxembourg. It will be very difficult to defend.

If you have disposed of coins, make sure you declare it properly.

There seems to be a range of initiatives right now in both the Treasury and the government that is addressing tax policy. The 15% universal minimum tax rate for corporations seem to be released perfectly in line with the crackdown in crypto activity.

Definitely not a coincidence I'd say, and the internal revenue services across the world will likely be looking to cash in with the crypto boom. Be smart about taxes though - if you just need money for short term purchases, consider taking a loan and keeping your BTC positions open so that CGT doesn't incur.

I am not sure which journalist you are talking about because i have not heard about a case like this where a reporter is killed for publishing news about unaccounted money. It is not the rich that are stealing the crooked who makes money through illegal ways are stealing money from you and for that you cannot blame all the honest hard working people that are making money by legal ways.

The problem with going after tax evasion is that if anyone wants to find any loophole and target me then they can very well find in any of the tax documents i filed and i am not sure how these global data sharing initiative will take place.

According to the IRS, every cryptocurrency transaction that you make needs to be reported in the income tax return. It doesn't matter whether you are transmitting $0.10 or $1,000 worth of coins. You need to enter the details everytime you purchase something with crypto. So at least within the US, you can't escape the tax liability when you purchase anything with BTC. Now the catch here is that if you do such purchases hundreds of times in a year, it gets quite tedious to enter the details. So a better option would be to use a platform such as PayPal, which will convert your coins to USD, before you make the purchase.

And the next thing is that people will begin to use cryptocurrencies directly to buy stuff and avoid paying any taxes because of it, then governments will begin to fine tune their chain analysis techniques and people will use techniques to avoid them, this is nothing but an arms race and the more the government tries to squeeze their citizens to maintain an economic model that it does not work the more the citizens of those countries will resist peacefully.

Sounds like you answered your own question. "Is the government doing what they are supposed to do?"  Enforce the tax laws?  Yes.  The only people complaining about the privacy of crypto are those trying to dodge taxes.  There is no privacy in any of your earnings because your employer is required by law to disclose your earnings to the government.  Crypto isn't a magic land where the tax laws suddenly don't apply, no matter how much tax dodgers want that to be the case.

I do not think that they would be very good at doing it even if they tried. There are trillions and trillions of dollars that is stolen from the public by via of tax evasion even without crypto, these companies store insane amount of money overseas, there was panama papers that came out and it showed that the whole elite is storing their money secretly in a panama bank just to not pay any taxes and even show it as a loss to get bail out money while getting richer in the real fact. What happened?

I can tell you that zero rich person got punished for it, the only consequence for this was the journalist who uncovered this was murdered for it, nothing else happened to the elite. So, I can with clear mind say that rich will still steal your money and poor are already afraid of the nation and IRS so they are already paying the heavy pay for the wealthy not paying.

True. Anything that enables me as a citizen to earn because of the so-called stability that the "state" provides, i understand that I owe them taxes. Like another poster said, its part of the social contract

Now, If you look at a huge subset of the crypto-earnings, the value creation has no role played by the state. It is only because people the world over are trading and investing and giving value to random things from memes, NFTs to utility tokens. The way I see it, as global citizens, people have created an economy and have subsequently benefited from it. Some more than others due to downright scams, rugs, zero-regulation, 100X returns, better trades and so on.

When the state has not contributed to any of those returns, they shouldn't be taxable. In case of people using electricity for mining or on procurement of hardware, don't they already pay taxes when they buy these things? Bitcoin is the final good produced, so you cannot tax the final good as well as the equipment.

It is a complex question. I can see how one can be convinced that taxes are owed because of some round-about way of state enabling internet, providing stability and it all ultimately falling under the service category of Software development. Yet, when the state refuses to acknowledge that this "magic internet money" holds any value, then how does it expect taxes on it in the same way as other capital gains? Their is substantive argument on the "No taxes owed" side too.

Even through taxation rules, several activities that contribute towards stable value addition to economy are tax exempt. Like Provident funds, health insurance. There are activities exempt under the category of "not falling under jurisdiction". Those too are additional reasons that why cryptocurrencies (a common international good) should be exempt from taxation, or be taxed very little.

You might be seeing as the world bowing down to the US or China but truth is that global tax evasion has been a hotly debated issue in Global forums like G7 and OECD for quite some time now. In fact most of the fight revolves around the fact that while companies are operating in developing economies but giving their taxes in their head offices which are either in the developed nations or tax heavens. Because most tech giants operate in small countries without any physical establishment so they get away without paying any tax pretty easily despite gathering huge revenues from those countries in form of advertising income. Now these same global forums can be used against crypto tax invaders too and i think most of the countries would be in for it because in return US would help them too by sharing necessary details.

While it is nice to see Biden at least pretending to be helping to catch tax evaders and money laundering, all this ends up doing is moving exchanges into "offshore" jurisdictions. Whether the exchanges can still offer the same level of security and service in those destinations remains to be seen, but the great game of money chess continues, the pieces all just move around. Maybe Biden should focus on forcing large US based companies that have monopolized the internet to pay their fair share of tax where the consumer buys the product, rather than where ecommerce giants can funnel the money to their advantage - that is a much more dangerous avenue of tax evasion taking place right now and undermining countries antiquated tax systems worldwide.

     The main point here is that there is no need to be defensive about this if you are not or have not ever evaded your taxes in any way. I really do not see anything wrong with this and would totally support it. This thing that Biden is pushing actually has a lot of benefits. This is going to help reduce, if not entirely wipe out those annoying tax evaders that take advantage of anything they can. I just wish though that this doesn't get used in politics to force countries that do not want to participate to hand out data against their will and then be bullied by the U.S. just because they chose to decline.

I foresee a future wherein there will be a tight sharing of information regarding tax evasion and whatnot brought about by cryptocurrencies. It's becoming the next big thing, and it would be a waste if governments cannot tax it out and add the proceeds to their vaults. Biden's move is somehow aggressive and kinda telling of how would he be running the show in regards to tax evasion cases for the next years of his term. I do not see it as something extremely wrong as they have been doing this for years now even in normal tax evasion cases, but perhaps people are just taken aback with Joe's actions as privacy is crypto's strong suit, and most of us here feel that they are somewhat crossing the line on broad daylight.

In order to pay your taxes, first of all cryptocurrency should be legal in your country. This is one of the dilemma faced by users in countries such as India. The law states that if you are profiting from anything that is legal or illegal, you should pay the taxes. So even if you are doing something illegal and profiting out of it, you need to pay the taxes. And here it gets murky. In the tax return, you need to mention the source of your money. And how many people are willing to state that they did something illegal (i.e cryptocurrency trading) and profited out of it?