But keeping profits purely bitcoin and paying for services the same way is bound to attract the IRS eventually.
I doubt this really. Governments everywhere had other methods of taxation before the income tax, which only came to the US in 1913. Prior to that, the better part of the US federal revenue came from excise taxes on alchohol. Bitcoin just makes the income tax difficult again. It doesn't abolish a governments abilities to tax. The US might end up with a liquid fuel importation tax, which would work similar to Europe's VAT taxes on fuel. The results would be to vastly favor oil pumped and refined within the US is economically favored, but it's impossible to supply the US on domestic production alone. This creates a bottleneck that the government can watch (ports) and collect taxes.
I agree 100% that 100 years ago the US was more sensible about taxation (income tax is a big point). But the IRS has been co-oped as a pseudo-police force in recent decades. Watching the raids where the IRS shows up swat team style and confiscates everything in sight based on a "tip". Anything that makes wealth transfer hard to track has become illegal.
The post 9/11 "Know your customer" rules and the fact that you can be arrested and have money confiscated just for carrying a few thousand dollars shows a sad road ahead. I wish my comment was purely a tax policy issue but like the "Interstate Commerce Clause" abuse that the courts seem to just let slide, I see the US government as willing to use any means necessary to stop something they don't like.
I need to read up on a liquid fuel tax structure, but I was under the belief that the US has most of the refining capacity so the oil producers ship crude here to be refined. Not sure how that would work. I just worry for the mining pool operators in the US getting a "No Knock" visit for supporting something the government doesn't like. Hopefully it won't happen soon or at all.
