It would be very great if Bitcoin is not only recognised but also promoted from the government's side. We must understand that it's not the game of government vs people but it is something that inculcates true democratic values in the society. Decentralization would play a big role in the transformation and that's what blockchain is all about. Giving the power to those who are the end users of that thing, in this case, if the government is supporting Bitcoin then more and more people will use it and I am sure users won't have any issues with paying taxes for their earnings. It is just the matter of eliminating external control on our personal things.
Government won't bother unless majority of the citizen demand it. In united State as per survey it just 8 percent of the population are crypto literate.