Bitcoin Forum

I've been milling this over a bit and I think it will be extremely beneficial to liberty get get Bitcoin on the taxation radar.

Here's why;
The government relies mainly of violence to operate. It hides the true cost of that violence by enforcing a monopoly on the creation of money and being one of the primary beneficiaries of that monopoly.

The government as a whole though is not an intelligent entity and consists of individuals, some more clued up than others. Most however have no concept of sound economics or how government really operates. Conclusion; they don't know which segments of government are crucial to maintaining the status quo. The two most important elements being the gun and the printing press.

By helping the government to tax Bitcoin, instead of trying to hide incomes and money flows, we might be able to create the illusion that Bitcoin is helpful to their "cause". IE "Hey look a new form of income". We will however in the process remove from their reach the ability enforce the money monopoly (break their printing press). This will happen since Bitcoin will, when in widespread use, continue to increase in value as measured in fiat currency. More people will leave the fiat currency and this will lead to its eventual abandonment.

Once the above happens the government, if it wishes to continue it's violent activities, will be forced to extract the full cost via direct taxation. Since stealth taxes like inflation and "business tax" are much more damaging to normal people than they realize the true nature of what government is doing will become apparent to people and those activities will lose their air of legitimacy. The chances of people opposing those negative policies and opposing paying for them will then increase as well.

I completely agree with your analisys but I dont think we need to make an effort to get Bitcoin business taxed. They will get taxed even if they dont try to. What would be great is to have the government accept taxes in the currency being used in the trades and not only in dollars, but I dont think changing that is doable right now.

Good point, let me then rather say I think it is in our best interest to not resist on this point.

As for paying in dollars I think it would put negative pressure on the BTC price. So maybe working towards getting revenue services to accept alternative currency would be a positive move, then money stays in BTC as long as possible not triggering any sell trades. It would also incentivise governments to spend in BTC since they have BTC on hand and it is internationally usable.

But the government will never accept anything but their own currency to pay for taxes because that would undermine the monopolly on money. Maybe at local level its posible, like some USA state that accepts gold and silver to pay for taxes.