What if the Internal Revenue service of the US decided to tax bitcoin transactions, what would be the possible effects on its price and the bitcoin community. Will the other governments follow?
They can only tax merchants operating within their territory and if that will be the case many US merchants will choose to operate using vpn and underground where they cannot be trace,I don't know if they have the means to trace and tax each transactions ,bitcoin works very much different from all the other payment processor.
You are talking not so much about merchants as service providers
And only about those services which can be rendered remotely, including online services. But what about merchants and service providers that offer tangible goods and services such as, for example, hairdressing services? They need certain physical presence, so to speak, and they could be easily taxed or caught if they choose not to be taxed
Technically, taxation would involve tangible and intangible good. Regardless if you have a physical shop or an online (or even secret shop). What matters is that you gained income from your activities then that is taxable. A hairdressing services is much more easier to tax as it has a physical place of business where the service is rendered. Unlike digital goods where you don't even know which country it is coming from (if no info is disclosed). And these kinds of business is harder to tax because there are different taxation laws per country. But in the end everybody has to pay taxes on their earnings.
