Will bitcoin = public sector workers rioting??

[cryptoanarchist]

Been thinking about this for a while now. As bitcoin takes hold and the value continues to skyrocket, what will become of those left holding the bag? Public sector workers live off stolen money. What is going to happen to them when their money becomes worthless? Who are they going to blame?

Us???

There are a lot of public sector workers who are willing to kill you to get what they want (cops). All I'm saying is, with things going the way they are, we might want to start preparing for this outcome.

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[Hawker]

As long as we still need schools, hospitals, police, roads and all, why does the currency make any difference?

[herzmeister]

If people evade taxes with crypto-currencies, states will tax first and foremost real estate. You have to live somewhere you know.

I don't like today's nation states either though, they're indeed a Single Point Of Failure, a relic of history, a questionable authority, a false security as a social safety net of last resort, and, logically-philosophically speaking, an infinite regress when questioning their legitimacy.

I'd prefer to see crypto-currencies make us migrate to the synthesis of social-libertarian and market-libertarian ideas, which would look somewhat like the Mondragón Model: http://www.youtube.com/watch?v=-obHJfTaQvw

[Pente]

If people evade taxes with crypto-currencies, states will tax first and foremost real estate. You have to live somewhere you know.

For me, this is the correct way for a government to collect taxes. All taxes should be based on land. Governments own land, they don't own people.

Why should someone that moved to another country, pay taxes to the USA just because they were born there?

[Mike Christ]

If people evade taxes with crypto-currencies, states will tax first and foremost real estate. You have to live somewhere you know.

For me, this is the correct way for a government to collect taxes. All taxes should be based on land. Governments own land, they don't own people.

Why should someone that moved to another country, pay taxes to the USA just because they were born there?

It's harder to hide the truth that way   Not that it matters now, what with the truth being so readily available.

[User705]

Actually in the early democracies taxes were voluntary.  Crypto if successful will eventually be used to resist taxation since it can't be seized.  Public sector workers will have to go and do the same thing in the private sector but at an appropriate compensation level.

[lightfoot]

Oddly enough "public sector" workers do work....

*shakes head*

[lightfoot]

Actually in the early democracies taxes were voluntary.  Crypto if successful will eventually be used to resist taxation since it can't be seized.  Public sector workers will have to go and do the same thing in the private sector but at an appropriate compensation level.

And those democracies don't exist now because.....

*rolls eyes* Come on, I love Galt's Gulch as much as the rest of you, but you notice there are no doctors, toilet cleaners, trash men, and so forth there. Funny that, where is the best and most motivated sanitation engineer?

C

[Hawker]

Actually in the early democracies taxes were voluntary.  Crypto if successful will eventually be used to resist taxation since it can't be seized.  Public sector workers will have to go and do the same thing in the private sector but at an appropriate compensation level.

How do you reckon that will happen?  Value added tax will be unaffected.  Payroll taxes will be unaffected.  Land taxes will be unaffected.  Fuel, tobacco and alcohol taxes will be unaffected.  

Where exactly is the "resistance" to tax in a crypto currency?

[Mike Christ]

Actually in the early democracies taxes were voluntary.  Crypto if successful will eventually be used to resist taxation since it can't be seized.  Public sector workers will have to go and do the same thing in the private sector but at an appropriate compensation level.

They couldn't have been taxes if they were voluntary:

tax  (tæks)
 
— n
1.   a compulsory financial contribution imposed by a government to raise revenue, levied on the income or property of persons or organizations, on the production costs or sales prices of goods and services, etc

It's interesting to note, then, that without taxes, they still got things done

Also: it's funny how they worded that definition.  An involuntary contribution is more easily defined as theft or esp. ransom.

[User705]

@Hawker
The resistance comes from the inability to seize the wealth or tax through inflation.  If one choses to cheat and not charge VAT, Alcohol tax, land tax or whatever else it becomes much harder to collect it.  You have to physically spend more to come over and collect it from each individual member of society then you can possible get from the actual tax and in the process make the tax collectors visible and much hated.  The reason taxation by money printing works so well is that it costs so little to do.  Government can print 1% of total nation wealth and it costs very little compared to going to every household to collect 1% from them.
@MikeChrist
Yes you are correct.  I was referring to governmental/public works contributions.  In ancient Greece taxes were regarded as derogatory to the dignity of a free citizen.  Citizens were expected to help the city as part of being proud to be citizens.  Someone wanting to do something will do a better job then someone paid to do it and an even better job then someone forced to do it or pay for it.
@lightfoot
Relax.  Those democracies were the foundation for the current ones.  It was simply a historic reference not some sort of desire to return to ancient times.  There is nothing wrong with government solving local issues.  The problem arises when it starts dictating minutia from thousands of miles away on to different people in a one size fits all solution and then charging huge taxes to fix problems no one needs or wants fixing.

[Hawker]

@Hawker
The resistance comes from the inability to seize the wealth or tax through inflation.  If one choses to cheat and not charge VAT, Alcohol tax, land tax or whatever else it becomes much harder to collect it.  You have to physically spend more to come over and collect it from each individual member of society then you can possible get from the actual tax and in the process make the tax collectors visible and much hated.  The reason taxation by money printing works so well is that it costs so little to do.  Government can print 1% of total nation wealth and it costs very little compared to going to every household to collect 1% from them.
...snip...

If one ( presumably a shopkeeper) chooses to cheat and not charge VAT, one goes bankrupt because one has paid VAT on the goods when buying them.  That's assuming one is willing to go to jail as well.

You can't buy land without registering your legal title.  You can't register legal title unless you have paid stamp duty.

PAYE is deducted from payrolls by employers - you don't get to opt out.

I can go on.  A change to Bitcoin won't change the tax collection procedures that are often centuries old and work fine.

[User705]

You keep picturing a system that doesn't exist in reality.  There's lots of vat tax cheating now.  There's lots of jobs done for cash opting out of paye now.  You don't wonder how and why they do it now?  It's possible that if crypto gets bigger it only makes that easier to do not harder.  Currently there are few assets you can own that are not subject to easy government seizure and or debasement.  Public sector workers should be buying crypto as a cheap form of insurance just in case.

[Hawker]

You keep picturing a system that doesn't exist in reality.  There's lots of vat tax cheating now.  There's lots of jobs done for cash opting out of paye now.  You don't wonder how and why they do it now?  It's possible that if crypto gets bigger it only makes that easier to do not harder.  Currently there are few assets you can own that are not subject to easy government seizure and or debasement.  Public sector workers should be buying crypto as a cheap form of insurance just in case.

Lets make a deal.  I won't accuse you of living in a dream world and you don't accuse me of ignoring reality.  

VAT cheating on goods is negligible.  Tobacco cheating is a bigger issue but even that is only a nuisance.

VAT cheating on services is in that border area between negligible and unimportant.  A 1 man plumber who does your drains for cash is doing you a favour.  You have no way of knowing if he should be VAT registered.  If its a company, they don't dare do cash deals as the customer can inform on them and a VAT audit is every trader's worst nightmare.  

Cryptocurrency doesn't change any of this.  The tax system works.  Its worth saying that even if cryptocurrency made evasion easier, the risk is still huge.  You avoid £100k in tax but your wife leaves you.  Now you have to pay her to shut up and you may end up paying the £100k anyway along with penalties.  

I guess what I am saying is that the system is a lot more resilient that you give it credit for.  But as an Irishman brought up to believe that only fools pay the British taxes, I suppose I am bound to say that

[User705]

Ok.    These are more theoretical discussions then some sort of reality comments so I mean no offense.  Most assets even money itself have been co-opted by governments and are "rented" to the rest of the population with fees and taxes as the "rent".  Most people try to avoid this "rent" as much as possible.  That's just natural like an Irishman wants to avoid paying English taxes.    The system is very resilient and it's been built up that way for a long time but crypto is rearranging the entire way money is handled.  If it survives and expands a lot of things will be very different.  That's a big IF but in your example where you say well if you cheat you have to pay your wife £100K but with crypto no one can force you to pay her or take the assets from you to pay her.  That's the difference.  Contracts, Debt, Taxes all will be upended in ways we can't even imagine if crypto really gets big.

[Hawker]

...snip...
 That's a big IF but in your example where you say well if you cheat you have to pay your wife £100K but with crypto no one can force you to pay her or take the assets from you to pay her.
...snip...

What???

You are in jail until you pay the bitch  sweet lady.  You will pay her unless you fancy spending your life in the prison system.

[Morbid]

first thing you can do to protect yourself is to keep low profile about your interest in bitcoins. you will draw alot of attention on yourself once the media propoganda starts to blame bitcoin holders for destroying exposing the banking sector.

[User705]

...snip...
 That's a big IF but in your example where you say well if you cheat you have to pay your wife £100K but with crypto no one can force you to pay her or take the assets from you to pay her.
...snip...

What???

You are in jail until you pay the bitch  sweet lady.  You will pay her unless you fancy spending your life in the prison system.

I'm holding my tongue as promised but in the world we currently live in people don't go to jail for unpaid debts.  Certainly not for life.

[Wilikon]

I am stuffed! Too much turkey, but that stuffing was killer. And that rosé from France. What a nice touch.

Anyway.

So hmm. Yes. Taxes. So while I was stuffing my face earlier I was thinking about how we should find a way to make taxes as fun as bitcoin. Bitcoin is fun. It is exciting. Why is paying taxes not? Then, just when I was dropping my turkey leg I thought: "Why not have taxes on a ledger, visible for all to see? No one will know who is paying what, etc. But the people paying taxes would know exactly to the cent where it is going and how the machine of government is working. Call it, I don't know "The Most Transparent Government Ever!" T.M.T.G.E Machine for all to see.

The thing about the public sector is when you work for the State you will make sure the laws are not going to apply to you the same as everyone else. It is not a public sector problem, it is human nature. You will find a lobby that will fight to prove you need what you say you need because. That's it.

[Rassah]

VAT and sales taxes can, and will, be avoided more and more as it becomes easier to order stuff from abroad. Anonymous site, existing in a neighboring country with or without VAT, selling for Bitcoin so there is no way to tell where it is, stop the payments, or track that a payment was sent across the border, delivering products in plain brown package for much cheaper than the VAT paying local businesses.

Public sector worker money won't become worthless just because of lowered tax revenues. Government and private debt is continuing to grow, with no plans to stop. That can't just go on for ever without either a huge default, or a huge inflating away of the debt, both of which result in currency value decreasing dramatically.

Movies taught me that the best way to escape a zombie apocalypse is to move to an island. I'm thinking of Dominica. Anyone else want to join me, or have other islands to consider?