Bitcoin Will Kill The Income Tax

[1Referee]

this is not entirely true because first of all bitcoin is mostly an investment not our salary or day to day money to spend. and also it is because of this simple thing that there aren't taxes yet on bitcoin and its usage. and that will change if bitcoins starts to become more popular for payments and for salary.

Bitcoin itself isn't directly being taxed, but if you think logically, then Bitcoin isn't any different from money or anything else with value. The main point is that it adds up to your wealth, and over your wealth you have to pay tax every year. It also goes up for the profits that you have made with Bitcoin. You must pay tax over that as well. However, it's your honesty here that plays the most important role since you have the choice to declare everything like should be done, or to keep quiet about your Bitcoin holdings. That's also one of the main reasons the IRS has been asking Coinbase to release all kinds of information regarding its users. If you don't declare your coin holdings yourself, they will do everything to chase you down.

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[sportis]

As the age of cryptocurrency comes into full force, it will facilitate a subversively viable taxation avoidance strategy for many of the technically savvy users of peer-to-peer payment systems. In doing so, cryptocurrency use will act to erode the tax revenue base of national jurisdictions, and ultimately, reposition taxation as a voluntary, pay-for-performance function. In this post, I cover some of the benefits such a strategy will have for cryptocurrency investors, why our notion of taxation is ripe for disruption, and why cryptocurrency taxation is enabled by default.

Read The Full Article

I can't read the full article since I am not member of this site but reading only the abstract I would like to highlight the following points

1. I don't know not even I have read in history books that any country even these with the most liberal policy have established a voluntary taxation.
2. Let say that my currency is only bitcoin. Does anybody believes that I can to tax evasion? No it's utopia. If I want to buy a car the state will ask where the money are come from. So I will pay not only once to buy it but every year which this car is my property. Same if I buy a house or a field or any similar asset.
3. Only if I declare needy I don't pay taxes; But for what reason to have bitcoins and live as homeless?

[chesatochi]

But I heard some developing countries are internally proposing to withdraw the process of collecting income taxes. It could be a new revolution like they are thinking only taxes from business and properties are more than enough to run a government.

So, I believe bitcoin will not be the game changer here. It is a new trend that governments start think in different way.

http://www.thehindu.com/news/cities/mumbai/news/Will-abolish-income-tax-in-three-years-says-Swamy/article14395234.ece

This should be a revolution, when I receive my pay I already pay almost 50% in tax. When I go buy something in any store I pay again 15% in tax. Every year I pay tax on my propertie, so I think I already contribute enough in my country

I would like to see this idea implemented where I live

[xuan87]

yes if we only used bitcoin as our transaction and not change it to fiat then we don't need to pay income tax, this is why the government want to meddle up in our bitcoin transaction, because there are a lot of big transaction is done using bitcoin and the person didn't need to pay any tax, so the government want to regulate bitcoin and taxed bitcoin

[prtty2gal2]

Still there are many possibilities for government to track and put tax for a bitcoin user. If they find bitcoin is being converted into fiat and they will apply tax there. This will be the same case for bitcoin debit cards too. Direct bitcoin spending and P2P bitcoin conversion will be getting tax exemption in my understanding.

[YuginKadoya]

Overall, I agree with the assessment, that Bitcoin might ultimately kill taxation in its current form. However a precondition is that Bitcoin improves in terms of privacy. And it won't happen as a smooth transition, because resistance by those who source their power from taxation will be fierce. First of all we will see more surveillance and harassment by the officialdom. Only after they've experienced that such actions are to no avail we might move on to a better system.

Voluntary, pay-for-performance taxation is the ideal form of taxation, because it is the least wasteful and ensure that only those things are funded that bring real benefits for the citizen. Ideally, citizen would be able to propose improvement projects (e.g. "the street in my neighborhood is in bad shape and needs a new surface"). Subsequently, people would be able to donate "taxes" for what they think are the most relevant projects.

ya.ya.yo!

Well that is a nice idea, pay-for-performance taxation, the government will no longer collect taxes but only consolidates. But it maybe effective to certain countries but not on the Philippines. Using bitcoin to kill taxation might be effective to other countries but in the Philippines many are non taxpayers, and businessmen doe not declare their income properly. If voluntary taxation will be implemented I am sure that the government system will collapse in our country.

I don't think there is a difference between other countries and the Philippine regarding tax revenue and stuff like that because there are tax evaders in other countries as well all other countries has a non tax payers too, and regarding the form of bitcoin economy that is non traceable by the government do you still think that other countries are paying using their bitcoin I think not your income on bitcoin will not be a part of the system that are controlled by the government.

[noictib]

As the age of cryptocurrency comes into full force, it will facilitate a subversively viable taxation avoidance strategy for many of the technically savvy users of peer-to-peer payment systems. In doing so, cryptocurrency use will act to erode the tax revenue base of national jurisdictions, and ultimately, reposition taxation as a voluntary, pay-for-performance function. In this post, I cover some of the benefits such a strategy will have for cryptocurrency investors, why our notion of taxation is ripe for disruption, and why cryptocurrency taxation is enabled by default.

Read The Full Article

Actually in a country or a nation there are some responsibility  to make the nation develop So taxation is subjected for more income But in Bitcoin no one can prove that it is a currency of particular country or made in particular country So it is independent and owner is making money only by transaction charge .
So we can't say Bitcoin system can kill the taxation .

[NishantBansal]

Good article on how does Bitcoin affects businesses? - http://www.convergencenetworks.com/bitcoin-effect-on-businesses/

[BitcoinHodler]

as long as we are living in a society and we abide by the law, we can not, not pay taxes. nobody likes paying taxes and there is not denying that but not paying taxes on your income means doing something illegal and it doesn't matter if it is with bitcoin income or fiat income.

[davis196]

As the age of cryptocurrency comes into full force, it will facilitate a subversively viable taxation avoidance strategy for many of the technically savvy users of peer-to-peer payment systems. In doing so, cryptocurrency use will act to erode the tax revenue base of national jurisdictions, and ultimately, reposition taxation as a voluntary, pay-for-performance function. In this post, I cover some of the benefits such a strategy will have for cryptocurrency investors, why our notion of taxation is ripe for disruption, and why cryptocurrency taxation is enabled by default.

Read The Full Article

Offshore companies are already killing the income tax.Bitcoin won`t kill it.

The governments might start banning bitcoin because of the lack of taxation.

[Babayega31]

Bitcoin will truly affect the taxation issues, but right now users were converting to flat through bank accounts and using it. This possibly help government to some extent to levy taxation based upon the banking transactions.

No, it wont kill the income tax because it has its independent fees which online wallets has. Every transaction thats being generated online were being charged to bitcoin convertion and it goes to the government which being collected by the sites tax collections, thats why it doesn't kill the income tax government and bitcoin were both independent in every aspects.

[jtipt]

Nice idea overall but we are still a long way from realizing this dream. The first priority should be to increase adoption.

Dream of what?. It's indeed that not paying tax will be benefitable for an individual who doesn't want their hard-earned money to be taken from them but in other side avoiding tax also making the income of your country decreased hence the country can't offer facilities like what they've offered now. Avoiding tax mean contributing to destroying your own country

Exactly that's true but what do you think happens of most of the tax money lets exclude few developed countries other than them almost all country's governments are 90% corrupt most of the tax money goes straight into minister's pockets. Still bitcoin would only kill income tax as per OP its not the total tax a person pays so he will be still paying tax even if he doesn't pay income tax.   

[defined]

Cash money can do the same. It has been used on the black market for as long as it exists.
Bitcoin is even easier to trace than cash money.

[jtipt]

Cash money can do the same. It has been used on the black market for as long as it exists.
Bitcoin is even easier to trace than cash money.

No, but using cash to avoid tax is illegal but if you are using bitcoin since it is decentralized and the since the gov. doesn't control it you are not obliged to pay tax on it, assuming that bitcoin is legal in that country.

[Gotottack]

If you sold your bitcoins in the real world then you're liable for income tax. Even if you sold it online, then you profited from that transaction you will be liable for income tax. Because you earned something. You have to pay for taxes. Taxes is where your government gets the funds to run its services. Think about it, if there was not funds for the government no one will protect you, your country, or your properties. It will be anarchy.

[ethereumhunter]

If you sold your bitcoins in the real world then you're liable for income tax. Even if you sold it online, then you profited from that transaction you will be liable for income tax. Because you earned something. You have to pay for taxes. Taxes is where your government gets the funds to run its services. Think about it, if there was not funds for the government no one will protect you, your country, or your properties. It will be anarchy.

but if we sold our bitcoin with our friends and he send us the fiat into our bank account then we don't have to pay the taxes unless for monthly taxes from maintain our account in the bank. and this is why government is not give any permissions to bitcoin but in someday, the government will realize and will allow bitcoin as payment processor like fiat and other online processor.

[serjent05]

as long as we are living in a society and we abide by the law, we can not, not pay taxes. nobody likes paying taxes and there is not denying that but not paying taxes on your income means doing something illegal and it doesn't matter if it is with bitcoin income or fiat income.

But the current condition of bitcoin does allow people to not pay income taxes.  Or even it is counted as wealth.  Aside from that, you can easily hide your bitcoin wealth in the eyes of the government unless you shout out  that you are holding this specific wallet that have bitcoin in it.  So it is possible that bitcoin can kill government collection from Income taxes.

[defined]

Cash money can do the same. It has been used on the black market for as long as it exists.
Bitcoin is even easier to trace than cash money.

No, but using cash to avoid tax is illegal but if you are using bitcoin since it is decentralized and the since the gov. doesn't control it you are not obliged to pay tax on it, assuming that bitcoin is legal in that country.

Income tax is paid on income. Even if you get paid in sheep you are obliged to declare it and pay tax on it.

[crairezx20]

as long as we are living in a society and we abide by the law, we can not, not pay taxes. nobody likes paying taxes and there is not denying that but not paying taxes on your income means doing something illegal and it doesn't matter if it is with bitcoin income or fiat income.

But the current condition of bitcoin does allow people to not pay income taxes.  Or even it is counted as wealth.  Aside from that, you can easily hide your bitcoin wealth in the eyes of the government unless you shout out  that you are holding this specific wallet that have bitcoin in it.  So it is possible that bitcoin can kill government collection from Income taxes.

I think there is no power to kill government.. and i think in the future if bitcoin will be more use by many people government will take an action just to ask for taxes as a fee.. because bitcoin is business. But for now we can use it without paying taxes because we have still a freedom..
But i hope if bitcoin will be more popular and more people are using bitcoin i hope here in my country those government will not asking for taxes..

[thejaytiesto]

It's just not possible to avoid certain taxes. For example, if you want to buy a car, it's going to be impossible to hide from the government, let alone hiding real state. You can't pretend to avoid taxes on a house or on terrain because the government is not stupid and will find out. So the only way you could avoid that is if there was no government but I don't see that happening... so there. The only thing you could avoid is if you buy small things, but serious things is impossible to avoid. I saw don't risk it and pay the taxes unless you are making so little money that it's not even worth it.