Topic: Does the Bitcoin Foundation seek the taxability of bitcoins? - page 2. (Read 3973 times)

Regardless of how you earn money, you pay taxes on it. If you get paid in chickens, you pay taxes...

Here is my take.   Income is taxable, be it fiat, stock options, BTC or turnips.   If you are paid in BTC by your employer, then your wages will be reported (unless your employer is non complying), and your taxes withheld, just like now.   If you are business accepting BTC, it would be in your best interest to comply with tax laws, as you can bet there will probably be a bit more attention paid to businesses accepting BTC.

That said, there is plenty of room to hide income and dodge tax laws.  Of course, people have been doing this forever using cash.   If the government finds that too many people may be avoiding reporting income, they may move to a consumption tax rather than income.  I think it would be a positive side effect of BTC if that were to happen, as I like the idea that savers are rewarded.   A lesser of two evils.

Bitcoins have been taxable since day 1. So how can the Bitcoin Foundation seek something that has already been happening for close to 4 years?

Some good points made here by repentance.

While taxation generally is robbery [with violence], if tax rates are reasonably low enough (e.g. some Swiss cantons or the Isle of Man?), they aren't actually worth the trouble of breaking the law to avoid: one is simply miles better off just ponying up the money.

And in many countries you'll be paying a goods and services tax (or some other kind sales/transaction) tax each time you buy or sell gold as well as tax on any increase in its value between purchase and sale.  And even if the gold itself isn't subject to any taxes, if you make something out of it and sell that product a value added or sales tax of some kind is often applied.

The manner in which something is being used often determines its taxation liability.  I don't pay tax on money per se, but I do pay tax on money I receive as income (although not on money I receive as gifts or windfalls).  I pay tax on certain types of financial transactions.  If I trade currency, then I'll have a taxation liability in respect of that trading.  "Money" per se isn't taxable where I live, but many of its uses are - although those taxes are often invisible because they're included in the cost of goods and services.


Nope, but by lodging a tax return and paying tax on illegal activity there's one less thing with which you can be charged if you eventually get caught.  Taxation laws have brought a lot of illegal businesses undone.  I know there've been cases here where drug dealers have tried to claim the theft of their product as a tax deduction - I'll see if I can hunt them up.


I think this is common everywhere, as is being paid cash off the books as an employee.  If you get caught, you're likely to be prosecuted though.  A massive amount of people who get caught for tax evasion get caught as the result of tip-offs from people they've pissed off (about 60%, according to my daughter who used to work for the Taxation Office).  If you're going to participate in tax evasion at any level, try not to piss anyone off.

Would taxing profits from Silk Road sales make drug smuggling a legitimate business?

The (evil) IRS doesn't even have to know about those profits unless you convert to fiat. And even then, why not pay into a non-US bank account? I'm not making any claims of the legality of such actions, but AFAICS the only obvious way to tax BTC profit would be at the point of conversion to US$ paid into a US bank.

In Europe, where income and sales tax levels are high or even astronomical, it isn't unusual for private individuals and merchants to do business in cash and then conveniently "forget" about the 20+% VAT due on that transaction. Surely the same could work with BTC payments, if the merchant so desires, even though this is "technically" (haha) illegal.

Also, if you're not making a good faith effort to pay at least SOME tax on it, good luck explaining to the IRS that your BTC profits weren't taxable and you weren't evading taxes.  Get a good lawyer.

I think people need to separate the issue of whether or not Taxation is a just and moral thing, and what is being built with Bitcoin. As far as I understand it (and correct me if wrong) it wasn't a solution to avoiding taxation, that just seemed to be an interpreted byproduct of unbreakable crypto which attracted a ton of anti-tax folks to the movement. But that doesn't seem to be an inherent design choice of Bitcoin.

Getting it taxed would make it legitimate a hell of a lot faster. Not that I'm pro, but playing by the rules doesn't make it any less cryptographically verifiable and enforceable contracts.

Who cares what the TBF seeks or doesn't seek. Do YOU seek taxability of bitcoins?

I hope not.

Exactly. Income tax are disgusting violation of financial privacy.

There are no taxes for gold in many countries, why should Bitcoin be treated differently?

dumbass, what does sale tax mean to you?

I'm not sure I fully understand the question. IMHO it's like asking about the taxability of cash or Paypal. If a business sells something then it usually has to pay taxes for that sale, no matter what kind of payment the deal was settled in. Just because a transaction was done in a way that leaves no inherent paper trail (i.e. cash) doesn't change anything regarding the taxability.

Are you asking if the foundation is trying to get a ruling about Bitcoin's legal nature (i.e. currency vs. commodity) or are you talking about whether they are trying to legally tie Bitcoin transactions to taxable identities? The first one is very much needed in my opinion although there seems to be little doubt about it being eventually classified as a currency. The second thing on the other hand is simply futile because there is simply no sane way to do that reliably with a decentralized crypto-currency like Bitcoin.

Please, someone enlighten me where people seem to see a problem here.

Are you under the impression that most commerce is done by mail? What does this have to do with sales tax?

It is unlikely that merely because there is no explicit classification of Bitcoin it would mean it's untaxed. The question is how exactly to tax it. See Trace Mayer (sunnankar) and Bill Rounds' ebook on taxation of Bitcoin. In Europe it is very similar (but there are some differences). In principle all income you obtain is taxable unless specifically excluded. There are some countries that do not tax foreign profits, some do not tax dividends, for example.

Bitcoins can be treated legally as shares of a company.
All the tax framework for dealing with shares are already in place.

what, they going to search every piece of mail to make sure it is not part of a transaction?  What kind of world are we building?