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Author Topic: Why The Diamond Age was wrong about cryptocurrency preventing tax collection  (Read 4608 times)
Minsc
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August 28, 2011, 03:25:54 AM
 #1

http://whistleblowers.posterous.com/dailytech-inside-the-mega-hack-of-bitcoin-the
"The Diamond Age: Or, A Young Lady's Illustrated Primer, in which digital cryptocurrency was mentioned as a driving force that eliminated the nation state by destroying their ability to collect taxes from citizens."


Two thousand years ago governments collected taxes like this...

They went around and depending on how rich you were, they just told you it was tax time and to give them money.  If you were poor, you gave them something else like food (farmer).  If you built something and lacked money, you might build things for the government.

If all the rich have their money in bitcoins, they'd be like, "Give me some of your valuable paintings, jewelry, etc." though you could also just pay them bitcoins instead but they'd take something.


And actually this would be a better form of taxation.  No tax loopholes or anything.  The government just surveys your place, sees you have a lot, and they take it.

Oh and as for hiding stuff, they were always going around thinking the rich and sometimes the poor were hiding things.  In movies about 1500+ years ago, they governments sent armies around to find people's hidden assets.

But yeah as I said, the governments can always tax people.  And if they tax based on wealth instead of all these loopholes, then it distributes wealth better...  well... except that the wealthy influence government too much.

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PLATO
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August 28, 2011, 04:35:20 AM
 #2

You're assuming people would give up their Bitcoins willingly? I don't think it would be that easy. Particularly oppressive people would wind up on an assassination market and the problem would solve itself.
Gabi
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August 28, 2011, 05:08:35 PM
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You are assuming new laws. Sure, if bitcoin start being used to evade taxes, governments can make new laws to stop that. But with current laws, bitcoin is not a taxable thing.
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August 28, 2011, 09:54:09 PM
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It would be much simpler to just have a single land value tax. Land can't be hidden, it is easily snatched away if you don't pay up, and its value is less ambiguous than "paintings and jewelry". But I agree with Plato that a mainstream cryptocurrency would land a serious blow to the established power structure. It would be an uphill battle for governments to keep control over us.
Hawker
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August 29, 2011, 12:20:06 PM
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It would be much simpler to just have a single land value tax. Land can't be hidden, it is easily snatched away if you don't pay up, and its value is less ambiguous than "paintings and jewelry". But I agree with Plato that a mainstream cryptocurrency would land a serious blow to the established power structure. It would be an uphill battle for governments to keep control over us.

A land tax would simply push up the price of food and be preceived as a tax on the poor.  An EU style value added tax, which is not applied to food and clothing, is a far more likely response.

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August 29, 2011, 07:09:29 PM
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A land tax would simply push up the price of food and be preceived as a tax on the poor.  An EU style value added tax, which is not applied to food and clothing, is a far more likely response.

Similarly, land which produces food could be exempt from paying taxes. Also VAT is a regressive tax, it hurts the poor way more than the rich. Not to mention it could just be bypassed with black markets so it would do nothing to stop the onslaught of a mainstream cryptocurrency.
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