Peter R
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December 07, 2013, 09:41:20 PM |
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Again merchants cant use bitcoin as media of exchange because they would have to pay taxes on any gain in value of bitcoin itself which is much to cumbersome as it involves enormous paperwork. Thats why we have no competition in media of exchange. Again its one way the government makes sure only dollars are used, there are other ways as I have explained.
Service like BitPay help businesses transition from dollars to BTC, while removing the paperwork/record-keeping barriers you described above. A coffee shop I frequent here in Vancouver simply enters the dollar amount for my coffee, and BitPay generates a QR-code-based invoice that I scan with my phone and pay. BitPay then converts these bitcoins to dollars and gives the coffee shop the *exact* amount they requested, minus a 1% fee (less than credit cards). BitPay absorbs all exchange risk and eliminates any "currency-exchance / capital-gains" accounting. It is *easier* for a vendor than getting set up with Visa. In the future, and as the bitcoin economy grows, it will become advantageous to *never* convert to fiat. I have described "real-time" tax-collection systems for merchants such as coffee shops, in other posts. Such systems could remit the VAT instantly as it is collected on each purchases. Furthermore, the tax-authority could instantly credit the merchant with bitcoin payments to offset input tax credits against tax-deductible supplies like coffee beans or electricity bills. In a world where all customers pay in bitcoin and all vendors accept bitcoin, it would be possible to pay your VAT taxes but never have to fill out another form again! My point is that bitcoin will help to streamline government, making it more efficient, and restoring peoples faith in these institutions after the scandals from the recent financial crises.
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Wilhelm
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December 07, 2013, 09:47:23 PM |
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You are just babbling and have not read the thread.
I have read the thread and you talk about "Governments have already effectively made it impossible for people to use bitcoin as a medium of exchange, as they expect taxes to be paid on bitcoin gains. Thus it cant function as a medium of exchange". You say that not being able to tax bitcoin will kill it. In my country we pay taxes on gold and even bitcoin so it is possible and in my country bitcoin IS a medium of exchange. In neighboring contries this is also true. America isn't the whole world you know. We have systems in place for verifying that taxes are paid. If you buy a house or car beyond your means and can't explain where the money came from and haven't paid taxes you have a problem. Thats why you dont have competition in medium of exchanges. Everybody using alternatives has to pay taxes on the medium of exchange! That obligation also kills any anonymity you might have btw.!
Bitcoin is an open system and not anonymous. If you use your bitcoins your identity can be associated. No it will not change. Inflation is the most powerful way to tax. Inflation is only possible if government has control over money. Read your history.
LOL you do know that inflation makes money worth less? Inflation happens because dumbasses print money so they have more. This is not tax this is devaluation of money to make your debts less and income greater. Tax is money taken from the population, inflation is printing money or money losing value. Not very convincing for the average joe who wants to either store wealth in gold or bitcoins. Again you say it cant be hacked but you overestimate your own intelligence.
I explain how it can be hacked and when it can be hacked. Did I say it cannot be hacked? I explained that banks are more vulnerable once the technology does appear. Also address theses points for the average joe: 1) What if my money is outcompeted by a different altcoin? 2) What can I do with Bitcoin except dumping it on the next guy? Silver I like, I can touch it, its used in industry, it looks great. 3) I cant be sure that the limit cant be broken. I have no trust. 5) I rather choose something stable thats not a technology to store wealth over long periods of time.
Why do people put their money on bank accounts? Ow because they can smell and touch it right? What's the difference between money on a bank or in a bitcoin wallet? 1) What if the Euro outcompetes the Dollar? Ow that's happening right now .... 2) You can't touch money in your bank account. Money is paper with a promise on it also no intrinsic value. 3) You mean the 21 million coin limit? Other coins forked from the bitcoin have hit the limit and it works. Well the dollar has no limit since it's being printed by the thousands and this isn't something average joe has a problem with. 4) You can't count cos you missed 4 ![Cheesy](https://bitcointalk.org/Smileys/default/cheesy.gif) 5) Yeah choose the stability of the dollar. ![Smiley](https://bitcointalk.org/Smileys/default/smiley.gif) See you arrogantly assume bitcoin is the best way without ever considering that there are safer alternatives.
Did I say bitcoin is the best? No bitcoin is a good medium in it's first years of development. It will take time for stability. Bitcoin has it's problems but atleast it's an open system so you can see every transaction. You talk about safer alternatives, yes there are safer alternatives but what's stopping a bank from protecting your bitcoins for you? Bitcoin has the possibility for being safe it will take time. Your comparing the first few years of bitcoin with hundreds of years running fiat money. You can't expect it to get to a mature level without going through a rough patch.
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deisik
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December 07, 2013, 09:48:15 PM |
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Service like BitPay help businesses transition from dollars to BTC, while removing the paperwork/record-keeping barriers you described above.
A coffee shop I frequent here in Vancouver simply enters the dollar amount for my coffee, and BitPay generates a QR-code-based invoice that I scan with my phone and pay. BitPay then converts these bitcoins to dollars and gives the coffee shop the *exact* amount they requested, minus a 1% fee (less than credit cards). BitPay absorbs all exchange risk and eliminates any "currency-exchance / capital-gains" accounting. It is *easier* for a vendor than getting set up with Visa.
This is the post I was waiting for. That argument for bitcoin to fail because of some paperwork looked fishy right from the start. I just could not take it serious. If anything, such things usually could be fixed pretty fast...
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porc (OP)
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December 07, 2013, 09:54:22 PM |
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Again merchants cant use bitcoin as media of exchange because they would have to pay taxes on any gain in value of bitcoin itself which is much to cumbersome as it involves enormous paperwork. Thats why we have no competition in media of exchange. Again its one way the government makes sure only dollars are used, there are other ways as I have explained.
Service like BitPay help businesses transition from dollars to BTC, while removing the paperwork/record-keeping barriers you described above. 1) A coffee shop I frequent here in Vancouver simply enters the dollar amount for my coffee, and BitPay generates a QR-code-based invoice that I scan with my phone and pay. BitPay then converts these bitcoins to dollars and gives the coffee shop the *exact* amount they requested, minus a 1% fee (less than credit cards). BitPay absorbs all exchange risk and eliminates any "currency-exchance / capital-gains" accounting. It is *easier* for a vendor than getting set up with Visa. 2) In the future, and as the bitcoin economy grows, it will become advantageous to *never* convert to fiat. I have described "real-time" tax-collection systems for merchants such as coffee shops, in other posts. Such systems could remit the VAT instantly as it is collected on each purchases. Furthermore, the tax-authority could instantly credit the merchant with bitcoin payments to offset input tax credits against tax-deductible supplies like coffee beans or electricity bills. In a world where all customers pay in bitcoin and all vendors accept bitcoin, it would be possible to pay your VAT taxes but never have to fill out another form again! My point is that bitcoin will help to streamline government, making it more efficient, and restoring peoples faith in these institutions after the scandals from the recent financial crises. 1) You just describe a method that moves the costs of paperwork from the business to the customer. 2) You are going down the deep end. Government wants you to use and hold onto their currency so that they can inflate and steal purchasing power. Collecting taxes is not going to solve that problem. I dont see how converting fiat to bitcoin and then bitcoins back to fiat (spread) PLUS the paperwork will be viable (less costly than credit cards).
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ilpirata79
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December 07, 2013, 09:59:41 PM |
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For merchants its complicated as they have to track the prices of bitcoin for each bitcoin they hold and sell. Why would a merchant want this? Again you keep assuming bitcoin will be adopted despite it being more complicated than government currency.
So you imagine the merchant having to manually write down on a piece of paper about each bitcoin (or even fraction of) he/she receives or sells ... ok... if that's your argument, I am done. Best regards, ilpirata79
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porc (OP)
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December 07, 2013, 10:06:52 PM |
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For merchants its complicated as they have to track the prices of bitcoin for each bitcoin they hold and sell. Why would a merchant want this? Again you keep assuming bitcoin will be adopted despite it being more complicated than government currency.
So you imagine the merchant having to manually write down on a piece of paper about each bitcoin (or even fraction of) he/she receives or sells ... ok... if that's your argument, I am done. Best regards, ilpirata79 There are entire businesses apparently that specialise in removing this hassle. Again these costs plus conversion from fiat to bitcoin back to fiat (spread) costs are quite enormous. Again that was just one way government make transacting in bitcoins costly. The other way to kill bitcoin as a medium of exchange is straight out prohibiting businesses to accept bitcoin. Again they like their money monopoly.
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porc (OP)
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December 07, 2013, 10:24:53 PM |
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Learn history. Gold has been used as money for thousands of years.
Your interpretation of the Great Depression is incorrect but lets not go into this.
I am asking you why nobody is using gold (not gold standard!) as a media of exchange. (The answer is tax laws!, like bitcoin).
Because it is heavy, cumbersome, liable to tear and wear as well as counterfeiting and defacing. Actually, it is you who have to study history here. Silver coins were primarily used as a means of exchange, at least in Europe (don't know much about other countries), gold was stashed away as a store of value above anything else except jewelry... hint: electronic gold. reason why nobody uses eletcronic gold: government enforces its monopoly (see gold money, liberty dollar) bitcoin is not going to be an exception. you have not made the case. ways government could undermine medium of exchange value: 1) prohibit merchants using it 2) costly tax laws 3) raiding miners 4) prohibiting exchanges List is endless. Store of value like gold? I dont think so, see OP.
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porc (OP)
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December 07, 2013, 10:32:39 PM |
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Service like BitPay help businesses transition from dollars to BTC, while removing the paperwork/record-keeping barriers you described above.
A coffee shop I frequent here in Vancouver simply enters the dollar amount for my coffee, and BitPay generates a QR-code-based invoice that I scan with my phone and pay. BitPay then converts these bitcoins to dollars and gives the coffee shop the *exact* amount they requested, minus a 1% fee (less than credit cards). BitPay absorbs all exchange risk and eliminates any "currency-exchance / capital-gains" accounting. It is *easier* for a vendor than getting set up with Visa.
This is the post I was waiting for. That argument for bitcoin to fail because of some paperwork looked fishy right from the start. I just could not take it serious. If anything, such things usually could be fixed pretty fast... Even if these services can reduce the cost by using economy of scale, the cost is still present. Add that to the cost of exchanging fiat for bitcoins and you have high transaction costs. Also my main argument is again that value as a medium of exchange wont be it, as governments can prohibit its use, close down exchanges, raid miner networks. So whats left might be the store of value argument. Again I have addressed this already. I dont believe its a viable alternative to something like gold or silver.
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Hfertig
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December 07, 2013, 10:46:24 PM |
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Finally someone with common sense.
Any Altcoin is as good as Bitcoin as a medium of exchange.
Interesting is that only few people are using them as a medium of exchange. On one side no one wants to spend theirs, as they could be worth more tomorrow. On the other side, apart of some enthusiasts, no vendor wants to accept them as they are too volatile.
I believe that the high volatility is damaging Bitcoin. Bitcoiners love it, as they made a lot of money. I would have prefered a more slower and constant rise, 2%-5% p.a., or even flat. This would have made adoption more easy.
Any person with some sensibility for risk will not touch Bitcoins until they are stable for at least a year. The big price increase over the last a few weeks and now the upcoming crash are damaging the future of Bitcoin.
Currently it is only seen as a "get rich quick" scheme, and I don´t believe that this was its purpose.
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Peter R
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December 07, 2013, 10:52:19 PM |
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Again merchants cant use bitcoin as media of exchange because they would have to pay taxes on any gain in value of bitcoin itself which is much to cumbersome as it involves enormous paperwork. Thats why we have no competition in media of exchange. Again its one way the government makes sure only dollars are used, there are other ways as I have explained.
Service like BitPay help businesses transition from dollars to BTC, while removing the paperwork/record-keeping barriers you described above. 1) A coffee shop I frequent here in Vancouver simply enters the dollar amount for my coffee, and BitPay generates a QR-code-based invoice that I scan with my phone and pay. BitPay then converts these bitcoins to dollars and gives the coffee shop the *exact* amount they requested, minus a 1% fee (less than credit cards). BitPay absorbs all exchange risk and eliminates any "currency-exchance / capital-gains" accounting. It is *easier* for a vendor than getting set up with Visa. 2) In the future, and as the bitcoin economy grows, it will become advantageous to *never* convert to fiat. I have described "real-time" tax-collection systems for merchants such as coffee shops, in other posts. Such systems could remit the VAT instantly as it is collected on each purchases. Furthermore, the tax-authority could instantly credit the merchant with bitcoin payments to offset input tax credits against tax-deductible supplies like coffee beans or electricity bills. In a world where all customers pay in bitcoin and all vendors accept bitcoin, it would be possible to pay your VAT taxes but never have to fill out another form again! My point is that bitcoin will help to streamline government, making it more efficient, and restoring peoples faith in these institutions after the scandals from the recent financial crises. 1) You just describe a method that moves the costs of paperwork from the business to the customer. 2) You are going down the deep end. Government wants you to use and hold onto their currency so that they can inflate and steal purchasing power. Collecting taxes is not going to solve that problem. Bitcoin is a disruptive technology. The social, political, tax, and welfare systems in place will be forced to adapt. You are trying to pigeon-hole bitcoin into the current system, and I think this is what is preventing you from imagining the future: bitcoin is a game changer. >> You just describe a method that moves the costs of paperwork from the business to the customer. Are implying that all citizens would be required to track their entry and exit points into bitcoin in dollar terms and pay capital gains on the difference? This is a worthwhile debate and I look forward to seeing guidance issued by various tax authorities on issues like these. Here's my take: Bitcoin makes VAT easier to collect but capital gains tax much harder to collect. If you attempt to collect tax on bitcoin gains, then you must also allow taxpayers to write-off bitcoin capital losses. This system would be very easy to cheat in favour of the tax payer and very hard to police by the tax authority. People hoping to minimize their capital gains on bitcoin could easily obfuscate their trail (in fact it would be hard not to): how is anyone going to know what exactly Sam bought with her bitcoins, or the exact price she bought them off of Joe? Furthermore, such a system would be ripe for abuse: less scrupulous people could easily "create" paper trails to appear as though they took an enormous capital loss in bitcoin trading. They could then use this to write off other capital gains in an unfair way. On the other hand, people would pay VAT seamlessly with bitcoin, and would have very little incentive or ability to avoid it. Merchants would love it, because the real-time tax systems I described would eliminate headaches. Tax-authorities could shrink because the blockchain could be audited in real time and payment would be automatic (no collection issues). >> You are going down the deep end. Government wants you to use and hold onto their currency so that they can inflate and steal purchasing power. Collecting taxes is not going to solve that problem. Do you imagine "them" as this cohesive group of people plotting to make your life miserable? The government (aka "they") are just a bunch of unique individuals trying to make a nice life for themselves and those close to them. I agree that the system in place steals purchasing power through inflation--most people do. But to imply that everyone in government drools over the thought of stealing your purchasing power is juvenile. Everyone knows there is corruption in places, but still most people in government are just like you or I. They dislike crazy banking fees and they worry about reckless government spending affect their purchasing power in retirement. The inflation problem is *systemic*. With the current Federal Reserve system, it is politically easiest to "print money and worry about it tomorrow." This is not a conspiracy. This is just people kicking the can down the road. Bitcoin forces governments to be accountable. This is better for everyone.
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Hfertig
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December 07, 2013, 11:04:34 PM |
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Reread the thread: They force us by expecting us to pay capital gains taxes on every media of exchange thats not government currency.
Why is that a problem? If bitcoin value increases compared to local fiat it's good for the merchant. They will pay capital gains which are ONLY a fraction of such gain. If they lose value or stay the same, no problem. That guy seems to be impossible to explain this. His argument is now reduced to the assertion that Bitcoin will fail because of paperwork businesses would have to fill out for exchange rate gains. I hope somebody would come here and explain it in detail whether it actually requires that much work and how often Personally, I don't believe him but have no experience in this field to refute with competence... Is it so difficult to understand. You will need to record the USD/BTC rate on every transaction. Here the problem starts, which exchange rate are you using ? The Goxed or the Stamped one ? Don´t forget the timestamp of the transaction needs to be matched with the price at the point of exchange of goods. Just imagine you would do 100 transactions as a merchant a day.... After a week you then cash out 50%. You will need to calculate the average rate USD rate you received the coins, to determine the profit you have made by accepting them. A week later you will need to cash out another 10%. You have had another 100 transactions, meaning your average price has changed again.... I would not want to do this unless this is automated.... This can be very messy. And if you do one mistake the taxman will surely come around and will have a look at all transactions you have done...
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FallingKnife
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December 07, 2013, 11:41:51 PM |
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These are tired arguments from the point of view of First World Westerners.
1) Medium of exchange.
"Bitcoin is only a medium of exchange when merchants accept it and hold onto it."
Not true. It' a medium of exchange when ANYONE accepts it. Not just businesses. Bitcoin was already an effective medium of exchange before anyone even knew what btc was.
"a) Governments have already effectively made it impossible for people to use bitcoin as a medium of exchange, as they expect taxes to be paid on bitcoin gains. Thus it cant function as a medium of exchange (same goes for gold btw.). Unless Government loses its control on its money monopoly this law wont be altered."
Maybe, some governments. Not ALL governments. Your argument assumes that all governments will collude to scheme to preserve the status quo. I doubt that this will ever happen, as evidenced by the world's tax havens holding out to provide a shelter for wayward wealth.
"b) Governments will prohibt merchants from accepting bitcoins. Again: They will never give up their monoply on money."
Maybe, maybe not. Some countries, such as Ecuador, don't even have their own currency. WTF do they care. And the governments may not have a choice, as Cyprus hinted at. If people think a local currency is shit or untrustworthy, they will flee to a different asset. Why not a digital asset that can be banked in the blockchain and retrieved from anywhere on earth? Beat's taping 100 ounces of gold to you body and then trying to get through an airport metal detector.
"2) Store of Value
After people realize that merchants are not adopting bitcoin and that it is not used as a medium of exchange, it will collapse in price. Will anybody store significant wealth in Bitcoin after this spectacular collapse? Not likely."
Your whole argument seems to hinge on ALL merchants failing to adopt, and ALL governments colluding to ban bitcoin. BTC has spectacularly collapsed 6 times in 2013, and will probably collapse 6 more in 2014. It's risky, yet people are drawn to it like, well, gold! Yet it's easier to manage than gold/silver, easier to trade, more private, more fun, more interesting, and it's in a limited quantity unlike Fiat and even Gold/Silver (they keep digging up more of that shit after all!).
Regarding miners.... yes, Governments might be able to threaten miners, but they can mine over a proxy. Or they can ship their miners to North Korea if necessary and operate from there. There are technological ways around the problem. And again, your argument hinges on ALL countries getting together to prohibit mining everywhere in the world. Miners could be located on international waters, if necessary. The problem is not insurmountable.
If Governments are as succesfull in stopping btc as they are in collecting internet taxes, then btc should be safe for a long time. I don't think the entire future of BTC hinges on it replacing the dollar. There are many benefits it can provide even if that doesn't happen.
I think BTC will continue to rise, and will easily surpass $2000 in 2014 as these benefits are discussed and understood, even against the backdrop of posturing by a few big bully governments.
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Impaler
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December 08, 2013, 07:24:55 AM |
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porc: Governments do not gain from inflation. Governments borrow money at interest like everyone else (though they generally have excellent credit) and the Bond rates reflect the inflation rate, what ever desire investors have for the security of a Treasury bond, they will subtract the rate of inflation from their offer. So while the government pays back every Treasury bill with dollars that are reduced in purchasing power they pay MORE dollars then they collected so it is a WASH at best.
People need to get off this idiotic belief that inflation (particularly at <2%) is a huge Wealth transfer mechanic. It is not, but INTEREST IS, the average working man pays HALF his salary to pay for Interest embedded in the cost of everything he consumes, he loses mere pennies to Inflation and it's not even the government that even gets thouse pennies. The Inflation-is-theft meme is quite literately the MATRIX that has been pulled over your eyes to conceal the truth, that you are a slave to USURY, a usury so pervasive that most of you people would fight to defend it.
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deisik
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December 08, 2013, 10:54:20 AM Last edit: December 08, 2013, 12:54:20 PM by deisik |
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That guy seems to be impossible to explain this. His argument is now reduced to the assertion that Bitcoin will fail because of paperwork businesses would have to fill out for exchange rate gains. I hope somebody would come here and explain it in detail whether it actually requires that much work and how often
Personally, I don't believe him but have no experience in this field to refute with competence...
Is it so difficult to understand. You will need to record the USD/BTC rate on every transaction. Here the problem starts, which exchange rate are you using ? The Goxed or the Stamped one ? Don´t forget the timestamp of the transaction needs to be matched with the price at the point of exchange of goods. Just imagine you would do 100 transactions as a merchant a day.... What you say are the problems we already have today (and had yesterday), there is nothing new. Then how do we handle them right now and how is Bitcoin different from any other foreign currency we have to work with? These problems are technical issues only. If such a need does arise, they will be fixed pretty soon through automation and what not. Do you think that payment systems like Visa or MasterCard or whatever are less intricate inside?
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katie1348
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December 08, 2013, 11:32:22 AM |
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A merchant, i.e. someone who is selling, must buy from their suppliers.
If the merchant takes BTC and their supplier does NOT, then thy must convert to another currency, one which their supplier will accept.
As more business and people take BTC as payment, a self-reinforcing process begins, in which BTC will become more accepted, as it is more accepted.
See how that works. We call it positive feedback.
This is why you see what you seen now.
K
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William Wood
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December 08, 2013, 12:47:13 PM Last edit: December 08, 2013, 03:55:15 PM by William Wood |
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Governments have already effectively made it impossible for people to use bitcoin as a medium of exchange, as they expect taxes to be paid on bitcoin gains. Thus it cant function as a medium of exchange (same goes for gold btw.). Unless Government loses its control on its money monopoly this law wont be altered.
I didn't get that point. If you buy something for dollars and then sell it for dollars, you still have to pay taxes. What am I missing here and what is the difference between dollars and bitcoins then? The difference is that the "medium of exchange" is taxed. For example: If the merchant accepts dollars and holds onto them and eventually uses them to buy new supply (i.e. sells dollars), he doesnt have to pay capital gains taxes on a possible increase in the dollars value. If the dollar trades higher versus the euro, the government does not force you to pay taxes on these exchange rate "gains". However if the merchant accepts bitcoin and holds on them and eventually uses them to buy new supply (i.e. sells bitcoins), he will have to pay capital gains taxes. The same is true for your average bitcoin holder. If he buys one bitcoin for 100 dollars and eventually buys products with the same bitcoin (which is now worth 500 dollars) he will have to pay capital gains taxes on the 400 dollar increase. He wont have to do this if dollars increase in value in comparison to bitcoins, euros or any other currency. My (layman) understanding of capital gain tax laws is that you have to pay capital gain taxes only if you buy the asset for a certain amount of dollars, then sell it for a bigger amount of dollars. In the example above it is not the case since the asset (bitcoins) is not sold for dollars but spent directly for buying goods. If this understanding is wrong, I am interested by sourced rebuttals.
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porc (OP)
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December 08, 2013, 02:32:23 PM Last edit: December 08, 2013, 03:09:29 PM by porc |
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Reread the thread: They force us by expecting us to pay capital gains taxes on every media of exchange thats not government currency.
Why is that a problem? If bitcoin value increases compared to local fiat it's good for the merchant. They will pay capital gains which are ONLY a fraction of such gain. If they lose value or stay the same, no problem. That guy seems to be impossible to explain this. His argument is now reduced to the assertion that Bitcoin will fail because of paperwork businesses would have to fill out for exchange rate gains. I hope somebody would come here and explain it in detail whether it actually requires that much work and how often Personally, I don't believe him but have no experience in this field to refute with competence... Is it so difficult to understand. You will need to record the USD/BTC rate on every transaction. Here the problem starts, which exchange rate are you using ? The Goxed or the Stamped one ? Don´t forget the timestamp of the transaction needs to be matched with the price at the point of exchange of goods. Just imagine you would do 100 transactions as a merchant a day.... After a week you then cash out 50%. You will need to calculate the average rate USD rate you received the coins, to determine the profit you have made by accepting them. A week later you will need to cash out another 10%. You have had another 100 transactions, meaning your average price has changed again.... I would not want to do this unless this is automated.... This can be very messy. And if you do one mistake the taxman will surely come around and will have a look at all transactions you have done... Finally someone understands. Exactly! Its enormously messy and increases cost considerably. Taxing the medium of exchange is one of the main reasons we dont have competition in the medium of exchange market. If everyone was free to use what ever medium of exchange he wanted we would have already switched to more desirable alternatives like digital gold. One of the main reasons we use the dollar is because it is the only medium of exchange that is not taxed.
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December 08, 2013, 05:25:13 PM Last edit: December 08, 2013, 07:40:36 PM by porc |
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1) Are implying that all citizens would be required to track their entry and exit points into bitcoin in dollar terms and pay capital gains on the difference? This is a worthwhile debate and I look forward to seeing guidance issued by various tax authorities on issues like these. Here's my take:
2) Bitcoin makes VAT easier to collect but capital gains tax much harder to collect. If you attempt to collect tax on bitcoin gains, then you must also allow taxpayers to write-off bitcoin capital losses. This system would be very easy to cheat in favour of the tax payer and very hard to police by the tax authority. People hoping to minimize their capital gains on bitcoin could easily obfuscate their trail (in fact it would be hard not to): how is anyone going to know what exactly Sam bought with her bitcoins, or the exact price she bought them off of Joe?
1) Yes. The need to pay capital gains tax is one of the main reasons we don't have competition in the media of exchange market. If there would be competition, people would already be using digital gold or silver. However, the need to pay capital gains tax on every transaction makes the legal use of such media incredibly complicated and expensive. Some countries do not allow losses to be written off. This, however, is not the main point: Even if you are allowed to write of losses the sheer amount of paperwork needed to document every bitcoin increase and decrease effectively kills off any competition to the dollar. The dollar is the only media of exchange which is not taxed (at least in the US, same for other countries, its always the government currency). Real world example: If an individual buys something for his bitcoin he will have to pay capital gains tax. For example, one stewardess was an early adopter of bitcoin and bought a ticket to space from Richard Bransons Virgin Galactic. Now the government could find out her identity (via virgin galactic) and ask her if she paid capital gains on her bitcoin stake she used to pay Virgin Galactic. Same goes for Virgin Galactic. Now you could make an example of her (show trial) in order to scare off individuals who might have used bitcoin and evaded taxes. You can also make an example of businesses who are easy to track. However, this is only part of the argument I made in the OP. Other ways (new laws not yet on the book) of killing off the media of exchange competition (like bitcoin, gold, silver etc.), is to prohibit their use or acceptance by merchants (GoldMoney, Liberty Dollar for example; the creator of Liberty Dollar (Nothaus) was labelled a domestic terrorist, real world example of a public show trial btw.). Thus, bitcoin will not function as a media of exchange. 2) You have to remember being a successful business and having lots of customers is a public act. Every company files tax returns and balance sheet statements. Now if you show lots of revenue you have to show lots of transactions to justify this revenue and pay capital gains taxes if these transactions are in bitcoin. The government can simply look at your bank account to see if you have corresponding transactions in its government currency. If your bank account does not show transactions because you used your bitcoin account they know whats up. So, again they will want to see a huge amount of paperwork regarding capital gains and bitcoin that must in their view go along with your revenue. Again, its not about the tax you pay, but about making it annoying for merchants to transact in bitcoin. If current capital gains law is not annoying enough they will find other methods like out right prohibiting bitcoin use (labelling anyone who does transact in bitcoin a terrorist, see Liberty Dollar) or use "soft force" via paperwork regulation to make bitcoin uncompetitive (like capital gains tax law). >> You are going down the deep end. Government wants you to use and hold onto their currency so that they can inflate and steal purchasing power. Collecting taxes is not going to solve that problem.
Do you imagine "them" as this cohesive group of people plotting to make your life miserable? The government (aka "they") are just a bunch of unique individuals trying to make a nice life for themselves and those close to them. I agree that the system in place steals purchasing power through inflation--most people do. But to imply that everyone in government drools over the thought of stealing your purchasing power is juvenile. Everyone knows there is corruption in places, but still most people in government are just like you or I. They dislike crazy banking fees and they worry about reckless government spending affect their purchasing power in retirement.
Bitcoin forces governments to be accountable. This is better for everyone.
I think you are totally off base. Politicians care about power and maintaining their power. Control over money and inflation is one of politicians most powerful instruments to finance their operation. Is it bad for the economy? Yes. However, price increases can be blamed on evil business men who are greedy. Printed money can be used to pay off debt, to finance close buddies who will give you special privileges, dolling out money to important voter segments needed for reelection without raising taxes and so forth. So, your statement that they like low transaction fees more than this enormous power is false. Read history and you will know. Protecting oneself against inflation is easy, its only the people saving in dollars that are affected (thats why they want you to hold dollars so they can steal your wealth if need be). Politicians know how to buy land, stocks and other hards assets to protect their savings. Again, thinking Bitcoin will replace the dollar monopoly is naive. Now if it does replace the dollar monopoly, we still have to ask the question if it will be the dominant media of exchange and store of value, after all there are alternatives. Now my thesis again is that it will be prohibited to use bitcoin as a media of exchange just like they closed down Liberty Dollar or Gold Money and in China this other alternative currency (forgot its name). China made a move on bitcoin already. Bitcoin will be outcompeted by Gold regarding the store of value aspect.
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shorena
Copper Member
Legendary
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Activity: 1498
Merit: 1530
No I dont escrow anymore.
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December 08, 2013, 05:41:34 PM |
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a) Governments have already effectively made it impossible for people to use bitcoin as a medium of exchange, as they expect taxes to be paid on bitcoin gains.
I dont know where you are from, but where Im from you pay taxes if you gain money commercially no matter if its BTC, USD, AUD or EUR. If I buy something private I dont pay taxes, wether I pay with BTC, USD, a local currency or chicken. So this point is invalid.
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Im not really here, its just your imagination.
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igorr
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December 08, 2013, 07:11:04 PM Last edit: December 08, 2013, 07:26:06 PM by igorr |
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U.S give most BTC to China and takes most real money of the Chinese people. Give nothing for real money !!! It is tactical general impoverishment of China. http://fiatleak.com/
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Cлaвьcя, Oтeчecтвo нaшe cвoбoднoe, Бpaтcкиx нapoдoв coюз вeкoвoй, Пpeдкaми дaннaя мyдpocть нapoднaя! Cлaвьcя, cтpaнa! Mы гopдимcя тoбoй!
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