Bitcoin and Sales tax | Bitcointalksearch.org

GreenStox

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Quote from: A.F.K on February 19, 2015, 02:07:56 PM

I do not think this logic works out. Tax collectors would just ultimately have a lot of bitcoin. That is the reality of the society we live. Resources move towards the center, or towards the so-called commanding heights.

They wont have alot of bitcoins because the tax collectors dont accept bitcoins.

But if they tax bitcoin, then the price of bitcoin will go down since everyone has to change it back to their local fiat to pay it, thus the more tax you put into bitcoin, the more it will destroy it

Exther2

full member

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Quote from: VOR on February 17, 2015, 03:46:23 PM

Say BTC does gain mainstream acceptance, and your girlfriend starts buying her $18 dollar lattes in starbucks using bitcoin. They have to charge sales tax on that transaction. There is a finite number of bitcoins. If they hoard them and spend fiat, on a long enough timeline, all the bitcoins will end up in hands of the tax collectors. what then?

It's simple - no taxes should be used when something is paid by crypto.
Anyway, if it does, they (new owners) will sell it back in the market.

crazyearner

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Will take a lot of work and legal work for bitcoin to go full mainstream however it is already doing that over the years and give it another say 3 to 5 years a lot more places will be using it considering who and what companys started accepting bitcoin as payment and using for other services last year is only going to get bigger and bigger unless one the alt coins knock bitcoin off the leaderboard.

okthen

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Even if fiat disappeared, what advantage would the sales tax people would have in hoarding them?
They need the money to pay public workers anyway.

A.F.K

newbie

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I do not think this logic works out. Tax collectors would just ultimately have a lot of bitcoin. That is the reality of the society we live. Resources move towards the center, or towards the so-called commanding heights.

VOR

newbie

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LOL, I feel a bit silly now. Thanks for the clarification.

bitcointaxes

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Sales taxes, like all taxes, are paid in USD. If you buy something from me for $10+tax, but pay in Bitcoin and so send me x BTC, I'll have that x BTC converted to $10.86 by the payment processor and put in my bank. I'll then send that $0.86 off to the state at the end of the year. The only effect is x BTC got sold for $10.86. If I instead decide to hold the BTC, I would be sensible to convert at least some to $0.86 to pay my taxes.

VOR

newbie

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Quote from: newIndia on February 17, 2015, 05:13:54 PM

Quote from: VOR on February 17, 2015, 04:49:53 PM

youre talking about the value of each bitcoin infinitely rising. like in 15 years each BTC worth 28.783 million dollars, and my coins appreciating in value .5% in the time it took to pay for my coffee.

somehow this seems unlikely.

This time your question is not clear...

If in the future there is 3 billion people using bitcoin for day to day activities, there will be a significant portion of the finite amount of coins constantly flowing into various governments tax coffers and temporarily (maybe) being taken out of circulation. For it to be a viable payment system for everyday use, the value of each coin would have to constantly be on the rise to account for the large amount of them being taken out of circulation.

I should also say that I don't believe bitcoin will ever fully replace the fiat system, at least not in the next 100 years

VOR

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Quote from: lolled on February 17, 2015, 05:06:59 PM

Quote from: VOR on February 17, 2015, 03:46:23 PM

Say BTC does gain mainstream acceptance, and your girlfriend starts buying her $18 dollar lattes in starbucks using bitcoin. They have to charge sales tax on that transaction. There is a finite number of bitcoins. If they hoard them and spend fiat, on a long enough timeline, all the bitcoins will end up in hands of the tax collectors. what then?

TO charge taxes they would have to know who is initiating the money. With mixers and partial anonymity its hard to know that, hence hard to charge taxes.

Have you heard the phrase "death, laundry, and taxes" before? There is a user on this board with a similar name. You're dreaming if you think you'll never have to pay any taxes because you used a mixer or whatever. Either mixers will be illegal, or bitcoin will be.

newIndia

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Quote from: VOR on February 17, 2015, 04:49:53 PM

youre talking about the value of each bitcoin infinitely rising. like in 15 years each BTC worth 28.783 million dollars, and my coins appreciating in value .5% in the time it took to pay for my coffee.

somehow this seems unlikely.

This time your question is not clear...

lolled

full member

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Quote from: VOR on February 17, 2015, 03:46:23 PM

Say BTC does gain mainstream acceptance, and your girlfriend starts buying her $18 dollar lattes in starbucks using bitcoin. They have to charge sales tax on that transaction. There is a finite number of bitcoins. If they hoard them and spend fiat, on a long enough timeline, all the bitcoins will end up in hands of the tax collectors. what then?

TO charge taxes they would have to know who is initiating the money. With mixers and partial anonymity its hard to know that, hence hard to charge taxes.

VOR

newbie

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youre talking about the value of each bitcoin infinitely rising. like in 15 years each BTC worth 28.783 million dollars, and my coins appreciating in value .5% in the time it took to pay for my coffee.

somehow this seems unlikely.

odolvlobo

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Quote from: VOR on February 17, 2015, 03:46:23 PM

Say BTC does gain mainstream acceptance, and your girlfriend starts buying her $18 dollar lattes in starbucks using bitcoin. They have to charge sales tax on that transaction. There is a finite number of bitcoins. If they hoard them and spend fiat, on a long enough timeline, all the bitcoins will end up in hands of the tax collectors. what then?

Governments don't hoard money. Anyway, the amount of bitcoins available would never go to 0 in your scenario because the value of a bitcoin would rise and the cost (and tax) would drop.

newIndia

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Quote from: VOR on February 17, 2015, 03:46:23 PM

Say BTC does gain mainstream acceptance, and your girlfriend starts buying her $18 dollar lattes in starbucks using bitcoin. They have to charge sales tax on that transaction. There is a finite number of bitcoins. If they hoard them and spend fiat, on a long enough timeline, all the bitcoins will end up in hands of the tax collectors. what then?

Bitcoin has some basic difference with FIAT system. It is infinitesimally divisible. Whenever someone is hoarding bitcoin, its value increases because the availability decreases in the rest of the system (pure demand supply economics). So, if someone hoards 1m bitcoin, value of the rest of the bitcoins increase. Hence, if I assume, there are N no. of bitcoin in circulation at a certain time with the market cap X USD when 1m bitcoin gets hoarded, value of each will increase* using the following formula: (X/(N-(10^6)) - X/N) USD

In effect, if you bought 1 ice-cream with 0.001 BTC before, it may take 0.0001 BTC now. Even if 1 BTC is left, it can do the job of 21m, because it is just a number.

*Please note that, value of Bitcoin also gets affected by other factors.

VOR

newbie

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Say BTC does gain mainstream acceptance, and your girlfriend starts buying her $18 dollar lattes in starbucks using bitcoin. They have to charge sales tax on that transaction. There is a finite number of bitcoins. If they hoard them and spend fiat, on a long enough timeline, all the bitcoins will end up in hands of the tax collectors. what then?

Topic: Bitcoin and Sales tax (Read 4378 times)