Topic: Okay. Charge tax on bitcoin. Is this fair policy? (Read 872 times)

My main use of BTC is as 1. I do however pay taxes whenever I convert to FIAT, not a huge amount but still, it does feel unfair sometimes.

This reminds me of the case of Al Capone. He amassed a fortune from bootlegging and racketeering, but what he actually went down for was neglecting to pay taxes on his illegal income.

Tax authorities don't care where your money comes from. They just want their cut.

Hmm. Not sure.

There are many things that are not illegal but aren't worth bothering declaring legal either, or it's so obvious there's no need to make a declaration about it, or so obscure they can't be bothered.

There are many countries where Bitcoin is taxable but they've never made any announcement about whether it's legal or not so I guess we're expected to treat it as legal unless told otherwise. In their eyes it's just another vehicle for making profit in the currency they tax you in and all profit is taxable.

They are charging tax means they are making bitcoin legal. There are many countries that do not have any particular law on bitcoin. In some countries like India there is an ongoing court case that will decide the future of BTC in the country. So if Gov start charging tax then traders will get the certainty that they don't have to face any legal action for holding or trading BTC.

The government of any state has the right to establish taxes on any activity of a citizen that brings him profit. The point is not that the government should make some efforts, create certain conveniences for this citizen to earn this profit. The government needs money for the general needs of society - the construction of roads and bridges, defense, the salary of budgetary professions, and so on. Therefore, everyone is obligated to make deductions for these common needs from any of their profits. We must pay taxes on profits in cryptocurrency, otherwise the government will take measures to prohibit the circulation of cryptocurrency, in which it, in principle, is not interested.

This is a hard compromise for bitcoin, if we want it to take a step further then I think this is a necessary action to do. I can imagine government taking actions to crack down many cryptocurrencies when they are not willing to compromise, this kind of scheme has been done to many businesses, I don't know much about law and politics but I think that having the government on the good side of things is the most favorable thing for cryptocurrency industry to advance, many will resist these changes and many will witness things.

The calculation of the tax on profits in cryptocurrency is quite logical and fair. We need to understand one simple thing: we do not pay taxes because the state helps us to make a profit, but because we live in society and in order for it to develop normally, we need to make contributions for general needs.
If we don’t want a stronger person to come to us and take our property, and sometimes our life, from us, we need to pay taxes so that someone monitors this to prevent this from happening.

Any government has the right to establish a tax on any type of activity of citizens that brings them profit. Regardless of where this profit comes from and whether the government and the state have any relation to its creation, they have the right to establish taxes on absolutely any activity.
Therefore, the surprise of some who are outraged that states do not have any relation to profits generated from cryptocurrencies, and therefore have no right to establish profits tax on it, is not true.

I have three points on this discussion as to why I think it’s a good idea to charge taxes on bitcoins:

1. Taxation of Bitcoins enables visibility in those transactions: with this the government is able to monitor the activities of the bitcoins, their movement and the different purchases, this helps lessen the possibility of using those bitcoins in illegal activities. This lessens the possibility of terrorism, online sex trafficking etc, etc. Then again, taxes should be imposed on Bitcoins in the United States (this would highly depend on the State transactions being made and the state imposing the tax itself.)

2. These taxes will greatly contribute to the flow of the economy of the United States: taxes paid by Bitcoins in general will give life to the economy of the united States. As much as the United States has different businesses around the world, another arm of giving life to the economy is a big advantage for them. Since many of us here know that bitcoins are now a boom in the market and if we are able to make this as another source of economic flow in the United States, then we are able to utilize its purpose for us.

3. Expansion in business opportunities: if bitcoins become officially legal in all states of the United States, then there are more opportunities for business in the comfort of your own home.
 

Genuine. Indeed, even in my nation we need not proclaim any salary earned in digital currencies. Government doesn't perceive digital currency as any material thing, thus, we don't need to make good on charges. Different nations may have various laws identified with exhausting bitcoin and it might be reasonable if residents of that nation are gaining significant measure of cash through bitcoins.

To a libertarian like me it's not that funny. Putting someone in jail because they don't want to contribute reminds me of communism where people were forced to work for the greater good of the country and those who would not contribute like avoid joining the army, landed in jail.

For me it's all about fairness. 10% would be a fair tax, but some countries try to impose 30%, or even more. In such cases the only option is to run and move somewhere else.
Being alone against the system and hiding your income will usually not end well. If they catch you, they'll make sure you're portrayed as a criminal who wants to take, but doesn't want to give. It's much better to just leave because there are still countries that treat you fair and charge 0-10% on your Bitcoin profits.

yeah USA rules are brutal.

every trade is reportable .

so if you sell 1 btc for 140 Ltc. and the order sells in 30 pieces of one or two or three coins you need to report each one as a separate tax event.

and you never left the world of coins and entered into the world of cash.

I have some micro split trades in 2018 that took under 30:seconds to sell 1 btc into some bch.
yet the twenty mini spilts all need to be reported separately. My 2018 return has 7000 trades entries and i only did 190 trades for the year.

a fucking mess. still dealing with it.  and this year 2018 i made  no money 💴 I took a small loss.

I feel like the time you're talking about is way closer than we think. Transparency comes with a cost.

The excuse may sound silly, but unfortunately I don't remember a single situation out of many in which one of my friends has ever asked about/thought of paying taxes for their BTC earnings. As I said, the necessary education just isn't there (I'm speaking for my country right now, it might be different somewhere else) and people take these earnings superficially most of the time.

Then they're toast. And there'll come a time where the tax man has a chain analysis program that pops out a giant bill for your every move in a fraction of a second.

That excuse reminds me of Lauryn Hill declaring she shouldn't have to pay her giant tax bill because she didn't choose to be born into the system she wound up in. Join the fuckin' club, honey. Funnily enough she wound up in jail.

True. There are some ways to somehow "escape" this event though, like Germany where taxes aren't imposed if you hold your cryptocurrencies for +1yr.

But I think the fiscal education is way too vague everywhere around the world. People just get income without even thinking they might have to pay taxes for their earnings. On the other hand though, I think there are more people knowingly and willingly ignoring the laws and going for the "I didn't even know" excuse.

 sees as a lottery , what do you mean by that ? im so slow , i dont get that sorry  .  or you mean lottery business were also being charged high tax by the governments ? well that is quite true  .  its also true that bitcoin uses are now being taxed to some countries  . luckily still not on mine country  but im not a trader anyway so i think im still safe if ever they will approve that bill soon  . still the 20 percent tax is i think too much to some that are affected with it  . thats threatening to the crypto traders and to the crypto market     .

'Because it's on the internet'.

For most people here I'll guess this is the first taxable thing they've ever come across outside their wages and the first time they've been responsible for reporting any tax themselves. Couple that with it coming up out of nowhere and I can understand why it's surprising to some but that doesn't exonerate you from the fooking massive bill you may run up. Wilful ignorance is not a convincing defence.

Yeah why is that? US citizens who have an average annual income of 40,126$ to 85,525$ have to pay a tax rate of 22% based on their earnings and suddenly if the government decides to charge nearly the same rate on Bitcoin it is unfair? Bitcoin isn't tax exempted to begin with, it is still an asset that can give you earnings by getting paid or through capital gains, not because it virtually exist it doesn't mean it is untaxable. What it seems to me right now people may have the wrong concept when it comes to Bitcoin, I don't even know where the whole idea of Bitcoin being untaxable came from since its isn't in the first place.

Why?

The chances are that wherever most of us live taxes people who trade in currencies, stocks and other financial thingies at similar rates or higher. Why should crypto get an exemption from that?

From where you got these news? otherwise,  in my opinion it is not logical and acceptable if any country would make these high value of taxes for traders, 20% of tax is unbelievable to be honest.  Furthermore, the global issue that  the governments want to control everything especially what is related to financial income, they want to use  their power through exploiting the people. We have nothing to do except dealing with it, I see that Bitcoin's community are always complaining,  and trust me it does not change anything if you give some excuses and complain about your situation.