Will bitcoin = public sector workers rioting??

[Hawker]

Rassah:
Its worth considering that we can already get goods direct from China via ebay and its made no difference to VAT revenue. There is simply no way a business on the scale of amazon can be run anonymously.  Any online business has to have a returns policy as things get damaged in transit. 

User71: this guy did go to jail http://www.dailymail.co.uk/news/article-2511744/Woman-says-20m-divorce-deal-isnt-This-isnt-declares-tycoons-wife-sum-calls-disgrace.html

If he cheated on tax over the years and if she knew, she has informed on him and that money will have been clawed back.

Its my opinion that, based on these facts, if Bitcoin were adopted as the main UK currency, tax collection would not be an issue.  I am open to been shown to be wrong.

[1714678033]

1714678033

[1714678033]

1714678033

[User705]

He went to jail for a few months.  Taxes and regulations are not voluntary.  The current rise of BTC in China is all about trying to get wealth out of there because it is restricted.  Yes if all of a sudden UK switched to BTC tax collection would go on as normal for a while and then slowly just like bitcoin adoption it would get harder and harder because you can't collect BTC it has to be willingly sent.

[Hawker]

He went to jail for a few months.  Taxes and regulations are not voluntary.  The current rise of BTC in China is all about trying to get wealth out of there because it is restricted.  Yes if all of a sudden UK switched to BTC tax collection would go on as normal for a while and then slowly just like bitcoin adoption it would get harder and harder because you can't collect BTC it has to be willingly sent.

He went to jail until he accounted for his assets. 

I think the only difference between our positions is that you think the state will allow tax evasion and won't lock people up if there is Bitcoin.  Here in the UK, tax evasion does get you imprisoned and you do stay in jail until the missing money is accounted for.  A switch to Bitcoin won't change that.

Perhaps you live in a more gentle state that turns a blind eye to tax evasion?

[davedx]

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

What makes Bitcoin so much better for tax evasion than, e.g., offshore bank accounts?

At the end of the day, you can always be audited...

[User705]

With coinjoin/zerocoin and blockchain pruning auditing will become useless.  I've posted somewhere before that if bitcoin succeeds the entire asset protection/offshore hiding industry will be hit very hard. 
@Hawker Don't underestimate the cost of tax collection.  Right now it's cheap.  Jailing people works but it's mainly for show because it won't work if you have to jail everyone.  Taxes aren't voluntary and people pay them only up to a point.  As soon as they can get away with it they don't pay them.  Bitcoin makes not paying them easier and also makes forcibly collecting them by governments much harder.  If bitcoin succeeds and will be widespread a new equilibrium will have to be reached and I suspect it will be at a much lower tax rate.

[Hawker]

With coinjoin/zerocoin and blockchain pruning auditing will become useless.  I've posted somewhere before that if bitcoin succeeds the entire asset protection/offshore hiding industry will be hit very hard. 
@Hawker Don't underestimate the cost of tax collection.  Right now it's cheap.  Jailing people works but it's mainly for show because it won't work if you have to jail everyone.  Taxes aren't voluntary and people pay them only up to a point.  As soon as they can get away with it they don't pay them.  Bitcoin makes not paying them easier and also makes forcibly collecting them by governments much harder.  If bitcoin succeeds and will be widespread a new equilibrium will have to be reached and I suspect it will be at a much lower tax rate.

You keep making the same assertion without providing any evidence. 

Please; do us all a favour - point to some form of business that is currently generating VAT income for the government that you think will stop providing VAT income if we use Bitcoin.

[Hawker]

With coinjoin/zerocoin and blockchain pruning auditing will become useless.  I've posted somewhere before that if bitcoin succeeds the entire asset protection/offshore hiding industry will be hit very hard.  
@Hawker Don't underestimate the cost of tax collection.  Right now it's cheap.  Jailing people works but it's mainly for show because it won't work if you have to jail everyone.  Taxes aren't voluntary and people pay them only up to a point.  As soon as they can get away with it they don't pay them.  Bitcoin makes not paying them easier and also makes forcibly collecting them by governments much harder.  If bitcoin succeeds and will be widespread a new equilibrium will have to be reached and I suspect it will be at a much lower tax rate.

You keep making the same assertion without providing any evidence.  

Please; do us all a favour - point to some form of business that is currently generating VAT income for the government that you think will stop providing VAT income if we use Bitcoin.

the uk 2nd hand car industry is a £36billion market.

I reckon a lot more dealers would avoid taxes if accepting bitcoin.

Two problems:  
1. Second car dealers are already unpopular.  All it takes is one customer to inform on them for VAT fraud and they go to jail as it is fraud.  
2. Right now they trade largely in cash so they choose what to report on VAT returns.  I don't see how a switch to Bitcoin changes that.

[User705]

Since I can't prove a hypothetical I'm not sure what you are looking for.  Do you agree that bitcoin provides protection from taxation called money printing?  Do you agree that seizing bitcoins is harder then seizing a bank account or cash?  Do you agree that the nature of bitcoin makes proving that someone owns any specific coins harder then proving you own money in a bank or cash under your mattress?  If your answer is YES then you already agree with

...  Bitcoin makes not paying them easier and also makes forcibly collecting them by governments much harder. ...

If your answer is NO then why?

[Hawker]

...snip...
Bitcoin makes it easy to hide your true earnings. A businessman could have hundreds of btc and alt addresses.

How would a customer know the businessman is not going to declare vat on his sale?

This is why the uk fascist govt likes a central banking system, as everything is tracked.

Please - don't just say things.  The very word "businessman" tells you that the guy is a small timer.  If you are talking about sole traders, then bitcoin is no different from cash.  If you are talking about a company, then hiding earnings requires a conspiracy and its very hard to do.

http://www.ft.com/cms/s/0/0f98bbc0-2db6-11e2-9988-00144feabdc0.html?siteedition=uk#axzz2m44AtgSP

Here are 10 ways tax evasion is tracked.  The cheating car dealer will be nailed by 2 and 3.

Take careful note - 9 of the 10 work just fine with Bitcoin.  The offshore bank accounts will be obsolete.

[cryptoanarchist]

Since I can't prove a hypothetical I'm not sure what you are looking for.  Do you agree that bitcoin provides protection from taxation called money printing?  Do you agree that seizing bitcoins is harder then seizing a bank account or cash?  Do you agree that the nature of bitcoin makes proving that someone owns any specific coins harder then proving you own money in a bank or cash under your mattress?  If your answer is YES then you already agree with

...  Bitcoin makes not paying them easier and also makes forcibly collecting them by governments much harder. ...

If your answer is NO then why?

Hawker is a government troll and you're wasting your time trying to talk sense into him. He's the type you're going to have to worry about when the governments collapse along with their phony fiat currency - a career parasite.

[Hawker]

Since I can't prove a hypothetical I'm not sure what you are looking for.  Do you agree that bitcoin provides protection from taxation called money printing?  Do you agree that seizing bitcoins is harder then seizing a bank account or cash?  Do you agree that the nature of bitcoin makes proving that someone owns any specific coins harder then proving you own money in a bank or cash under your mattress?  If your answer is YES then you already agree with

...  Bitcoin makes not paying them easier and also makes forcibly collecting them by governments much harder. ...

If your answer is NO then why?

Hawker is a government troll and you're wasting your time trying to talk sense into him. He's the type you're going to have to worry about when the governments collapse along with their phony fiat currency - a career parasite.

Google "ad hominem" - and if you have an actual response to my pointing out your post is factually incorrect, feel free to post it.

[Hawker]

Since I can't prove a hypothetical I'm not sure what you are looking for.  Do you agree that bitcoin provides protection from taxation called money printing?  Do you agree that seizing bitcoins is harder then seizing a bank account or cash?  Do you agree that the nature of bitcoin makes proving that someone owns any specific coins harder then proving you own money in a bank or cash under your mattress?  If your answer is YES then you already agree with

...  Bitcoin makes not paying them easier and also makes forcibly collecting them by governments much harder. ...

If your answer is NO then why?

Money printing is not taxation.  

No - both rely on your being locked up until you part with the funds.  The currency your bill is denominated in is irrelevant.

If you owe the money, what specific coin is used to pay the bill doesn't matter.  For example, if you want to register your new house, you have to pay stamp duty.  How does it matter what coin you use?

My question was simple.  Can you name an industry that would generate less VAT income under Bitcoin than under Sterling?

[Hawker]

...snip...


Unfortunately, I can't access FT.....

well bitcoin is cash, so obviously theres no difference.

However today the masses of people don't deal with large amounts of cash.
For various reasons credit/ debit cards, b/t, and cheques are the norm.

The businessman is therefore forced to open a "traditional" bank account otherwise he'll lose business.

My point is will people realise bitcoin is cash? Perhaps people won't care?

Plenty of sole traders make millions. Of course large corporations are in bed with govt anyway, and will comply.

Most tax evaders are probably sole traders, builders etc....

Bitcoin is going to put the businessman back in control.......

plus what if a business loses the private key or funds are stolen?
Is it possible to add that to the tax return as a loss?

My bad: http://www.tax-hell.co.uk/ten-ways-hmrc-checks-if-youre-cheating/

We are in agreement.  Bitcoin can be used to evade tax by the people who now use cash to evade tax.  Since that isn't a problem, a move to Bitcoin is no threat to the state.

[Hawker]

...snip...
plus what if a business loses the private key or funds are stolen?
Is it possible to add that to the tax return as a loss?

My bad: http://www.tax-hell.co.uk/ten-ways-hmrc-checks-if-youre-cheating/

We are in agreement.  Bitcoin can be used to evade tax by the people who now use cash to evade tax.  Since that isn't a problem, a move to Bitcoin is no threat to the state.

physical cash takes up a lot of space. So its probably easier to pay the tax, put the cash in a bank, and have an easy life.

But bitcoin is weightless, takes up no space and is ultra portable.

It would be easier if you read how tax evasion is tracked.  Can you access the tax-hell page?

[Hawker]

...snip...
plus what if a business loses the private key or funds are stolen?
Is it possible to add that to the tax return as a loss?

My bad: http://www.tax-hell.co.uk/ten-ways-hmrc-checks-if-youre-cheating/

We are in agreement.  Bitcoin can be used to evade tax by the people who now use cash to evade tax.  Since that isn't a problem, a move to Bitcoin is no threat to the state.

physical cash takes up a lot of space. So its probably easier to pay the tax, put the cash in a bank, and have an easy life.

But bitcoin is weightless, takes up no space and is ultra portable.

It would be easier if you read how tax evasion is tracked.  Can you access the tax-hell page?

Yes, i'm reading it now.....

Its just propaganda, fear and intimidation.

And the only thing i've learnt is that tax collectors are sneaky perverts.

Complete failures of humanity who get a power trip out of stealing other peoples wealth.

Its all common sense measures.  Apart from the offshore bank thing, I don't think you can point to anything that doesn't catch Bitcoin as easily as it catches cash.  So we are in agreement - Bitcoin will be used to evade tax by people who now use cash to evade tax.  Given that its not fully anonymous, it may even be more traceable than cash.

[cryptoanarchist]

Yes, i'm reading it now.....

Its just propaganda, fear and intimidation.

And the only thing i've learnt is that tax collectors are sneaky perverts.

Complete failures of humanity who get a power trip out of stealing other peoples wealth.

LOL...that's Hawker for you!

[Hawker]

Yes, i'm reading it now.....

Its just propaganda, fear and intimidation.

And the only thing i've learnt is that tax collectors are sneaky perverts.

Complete failures of humanity who get a power trip out of stealing other peoples wealth.

LOL...that's Hawker for you!

Jealous much that I sold 900 this week and that I still have over BTC1000 ?  That's not an attractive feature.

[User705]

Since I can't prove a hypothetical I'm not sure what you are looking for.  Do you agree that bitcoin provides protection from taxation called money printing?  Do you agree that seizing bitcoins is harder then seizing a bank account or cash?  Do you agree that the nature of bitcoin makes proving that someone owns any specific coins harder then proving you own money in a bank or cash under your mattress?  If your answer is YES then you already agree with

...  Bitcoin makes not paying them easier and also makes forcibly collecting them by governments much harder. ...

If your answer is NO then why?

Money printing is not taxation.  

No - both rely on your being locked up until you part with the funds.  The currency your bill is denominated in is irrelevant.

If you owe the money, what specific coin is used to pay the bill doesn't matter.  For example, if you want to register your new house, you have to pay stamp duty.  How does it matter what coin you use?

My question was simple.  Can you name an industry that would generate less VAT income under Bitcoin than under Sterling?

If money printing isn't taxation then what is it and why do Governments do it?  Also you keep saying you get put in jail until presumably you reveal your holdings and pay but the current mechanisms that exist simply don't allow that.  Fairly certain in UK you need evidence to get put in jail and bitcoin is superior to even cash in that regard.  Even in jail you are still able to spend bitcoins.  If bitcoin is superior then it may possibly replace cash.  If it does on a wide scale it presents challenges to governments by increasing the problems they currently have with monetary controls.  So yes in the short term bitcoin won't do much to the government and perhaps that's why they don't seem to be concerned but a wide acceptance and usage of it might change that.

[Hawker]

Its all common sense measures.  Apart from the offshore bank thing, I don't think you can point to anything that doesn't catch Bitcoin as easily as it catches cash.  So we are in agreement - Bitcoin will be used to evade tax by people who now use cash to evade tax.  Given that its not fully anonymous, it may even be more traceable than cash.

yeah, we agree, but I think evasion will increase.

very few people use cash today.

people pay through the banking system, which is completely monitored.

bitcoin could empower people to evade tax

Which is a good thing, because the nation state is dying.

I guess where we differ is in perspective.  I look from the point of view of a company and Bitcoin is just a currency from that point of view.  There is no way I would risk losing my business to evade taxes as a decent business supports you for a lifetime while being imprisoned and losing your right to be a company director screws you for a lifetime. 

[Hawker]

Since I can't prove a hypothetical I'm not sure what you are looking for.  Do you agree that bitcoin provides protection from taxation called money printing?  Do you agree that seizing bitcoins is harder then seizing a bank account or cash?  Do you agree that the nature of bitcoin makes proving that someone owns any specific coins harder then proving you own money in a bank or cash under your mattress?  If your answer is YES then you already agree with

...  Bitcoin makes not paying them easier and also makes forcibly collecting them by governments much harder. ...

If your answer is NO then why?

Money printing is not taxation.  

No - both rely on your being locked up until you part with the funds.  The currency your bill is denominated in is irrelevant.

If you owe the money, what specific coin is used to pay the bill doesn't matter.  For example, if you want to register your new house, you have to pay stamp duty.  How does it matter what coin you use?

My question was simple.  Can you name an industry that would generate less VAT income under Bitcoin than under Sterling?

If money printing isn't taxation then what is it and why do Governments do it?  Also you keep saying you get put in jail until presumably you reveal your holdings and pay but the current mechanisms that exist simply don't allow that.  Fairly certain in UK you need evidence to get put in jail and bitcoin is superior to even cash in that regard.  Even in jail you are still able to spend bitcoins.  If bitcoin is superior then it may possibly replace cash.  If it does on a wide scale it presents challenges to governments by increasing the problems they currently have with monetary controls.  So yes in the short term bitcoin won't do much to the government and perhaps that's why they don't seem to be concerned but a wide acceptance and usage of it might change that.

I am happy to talk to you about money printing in another thread.  What I'm not happy to do is use a non-standard definition of "taxation" in this thread.  Its as if I defined "currency" to include "platinum." With respect, we will have to agree to disagree for on that for now