State taxation through miner's fees

[Brunic]

I know I'm not going to make friends with this. I think there's an easy loophole every state could exploit if they wanted to tax Bitcoins.

We have many size of mining operations around the world. Some small with 1-2 GPU, other crazy big with a warehouse filled with GPU/FPGA/ASIC(soon). Those big miners are really visible, usually considered as businesses(like gigavps). Those big miners also have a sizable chunk of the hash rate and the chances that your transaction is confirmed by this group of people is somewhat high.

At that point, it becomes pretty simple to tax Bitcoins. Tax those big miners. Those miners are probably not interested in paying that tax on their profit and so, will trickle down the tax toward miner's fee. Those fees are small in our current "generation" era, but they will become more and more important later. At that point, we will probably have software that optimizes transactions included in a block to maximize the profit made when the block is solved. Refusing to include a transaction that doesn't cover the taxation will be easy to manage.

You want your transaction to be included in the block? Pay the tax or wait.

Pools could also be targeted by that type of regulation, especially those who have those big visible miners. Pools could be regulated and taxed...where they will trickle down the tax to the miners on the pool....where they will trickle down the tax to those who want their transaction to be confirmed. Yeah, you with your 5 GPU could always change pool and feel good about it, but the state don't care, they just have to target the big registered miners. Just evaluate the mining power this miner have and ask him where he is currently mining. Or better, give him a list of approved-by-state pools where he can mine and bingo! You can now tax the Bitcoin network as much as you want.

I have to say that I'm neutral on this. I'm not looking to start a fight State VS Anarchism. I just wanted to share my taught and see what does the community think of it.

[btbrae]

I imagine the free market argument dictates that as soon as you put a business at a disadvantage the competition will begin to eat them up. A tax would have to be universal to be effective and your proposed situation assumes that each government could enforce it and that every one of those governments is competent at doing so.

[Elwar]

So...a tax to end pools.

Ok.

Or run your pool in another country. No more Bitcoin revenue for your country.

See what happens to your community when you regulate/tax one of your main industries:
http://www.dailynews.com/news/ci_23024668/porn-film-permits-have-dropped-dramatically-l-county