Surely the Government has the right to tax fiat?

[boymilk]

Since fiat is a product developed by the Government, doesn't it have the right to tax it?

For example, if Satoshi Nakamoto or Sunny King or any other developer created a new cryptocurrency called "Taxcoin" and put a tax into the protocol, then obviously by choosing to use that alt-coin, you are accepting the tax that's built into the system.

I think there have been coins like this. Freicoin had 80 percent of the mining profits redirected to the developers for donation to charitable causes. Devcoin also has 90 percent of the mining profits go into open source projects and 10 percent to miners.

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[beatljuice]

Slightly different when you can choose to use the currency.

With fiat you can hide (maybe successfully, maybe not), or have a gun aimed at you while they drag you off to prison if you don't pay.

[Omikifuse]

Since fiat is a product developed by the Government, doesn't it have the right to tax it?

For example, if Satoshi Nakamoto or Sunny King or any other developer created a new cryptocurrency called "Taxcoin" and put a tax into the protocol, then obviously by choosing to use that alt-coin, you are accepting the tax that's built into the system.

I think there have been coins like this. Freicoin had 80 percent of the mining profits redirected to the developers for donation to charitable causes. Devcoin also has 90 percent of the mining profits go into open source projects and 10 percent to miners.

The government tax us not because they created fiat, its because we are making profits.

[zimmah]

Well yes, the issuers of the money have the right to tax it.

However it's a bit unethical to monopolize the issuing of money and then not only (heavily) tax it, but also inflate it.

Also, income taxes are very high (34 to 52%), and on top of that value added tax (VAT) is also very high. (21% in most of europe). And you don't really have a choice to opt out. I think this is really unethical as well, especially because they abuse most of the taxes and spend it on bullshit like 'defense', unnecessary amounts of politicians and bureaucrats and worst of all paying off debts that shouldn't exist in the first place.

The taxes are so extremely high not because the services provided by the government increased (quite the contrary in fact, the government hardly even offers any service at all anymore) but because they keep throwing money away and 'borrow'money from central banks who print it into existence and than the government has to pay it 'back' with interest. In other words we, the taxpayers, pay for stuff we don't get and never wanted because we have to.

Public transport? Privatized (and very expensive)
Phones / internet lines? Privatized
Education? Privatized and super expensive (although sometimes subsidized)
Healthcare? Privatized, and you have to pay your own insurance. Also, extremely expensive.
And so on...

Bitcoin may not be a way out of taxes, or at least that's not the primary intended use, but it may help change how economies work, and by extension how governments work. Maybe at some point we will have taxes that are much lower and that are actually being used to offer a service to the citizens. Or maybe we will not even need governments anymore because we will rebuild society in a way there's no room for corrupt governments, although that's probably a pipedream

[DeathAndTaxes]

Governments have taxed citizens as long as governments have existed and that is many centuries longer than fiat which is a relatively new invention.  Governments don't tax fiat because they make it, most also tax barter transactions as well.  Governments tax their citizens because they can.  You could eliminate fiat currencies world wide tomorrow and the IRS isn't going to disappear.

[cr1776]

It has been said that governments are the fiction that people use to attempt to live at the expense of someone else via the government as the third party enforcer.  They tax you to preserve their power by giving your own money back to you minus their own cut.

[Ron~Popeil]

I don't believe governments have an inherent right to tax. They simply use violence and the threat of violence to intimidate us into giving them our wealth. This is why I will never convert BTC to fiat. They don't earn it, they don't own it, and they won't get it.

[Gimmelfarb]

so when you say "writing tax into the protocol" or something similar, you mean a "miner's tax" and nothing else, right? sure, this is how devcoin works, as you mention. i would say any miner of the coin is subject to the "laws" of the protocol, and those in turn are determined by the devs. now, how centralized development and miner activity is will determine whether or not those "laws" can be enforced, or whether the protocol will be forked or will die.

[Trading]

The right of the state to tax fiat has no base on the fact that fiat is created by the state or by the central bank with licence by the state, but rather on the fact that the state give everyone certain services and demands payment also on grounds of solidarity, equality and "fair" share of our enjoyment of the benefits of society: https://bitcointalk.org/index.php?topic=617895.msg6931130#msg6931130

[Skele]

Since fiat is a product developed by the Government, doesn't it have the right to tax it?

For example, if Satoshi Nakamoto or Sunny King or any other developer created a new cryptocurrency called "Taxcoin" and put a tax into the protocol, then obviously by choosing to use that alt-coin, you are accepting the tax that's built into the system.

I think there have been coins like this. Freicoin had 80 percent of the mining profits redirected to the developers for donation to charitable causes. Devcoin also has 90 percent of the mining profits go into open source projects and 10 percent to miners.

Government is taxing citizens not the money, if satoshi had put a tax on bitcoin we surely had not addopted it, but governments try to tax every source of "income" an in any kind of money, even bitcoin.

[waldox]

taxing fiat is from the privilege of using fiat

[Trading]

Go tell the judge that if you get caught avoiding taxes on your bitcoin profits...

[ShameOnYou]

It's not really a "product" developed by government. It's just an age old system that they *force* people to use. (For example, try paying your taxes in bitcoin)

[ArticMine]

The right of the state to tax fiat has no base on the fact that fiat is created by the state or by the central bank with licence by the state, but rather on the fact that the state give everyone certain services and demands payment also on grounds of solidarity, equality and "fair" share of our enjoyment of the benefits of society: https://bitcointalk.org/index.php?topic=617895.msg6931130#msg6931130

+1

[waldox]

the power to tax is given by the people to the tax authorities
irs is hiding under colour of law (how ignorant people interpret laws they have no idea whats written or defined but by what they think it means)

[redwhitenblue]

The government right to impose taxes does not stop with fiat.

When you buy a car or a house you will owe taxes on this property.

Taxes should be used to fund government functions that cannot easily be done on an individual level. One example of this is national security/defense. It is not feasible for an individual to purchase national security so taxes should be paid to the government to fund the DoD, military, DHS and similar agencies. The same concept for consumer protection agencies like the SEC, law enforcement for the FBI.

On a local level, it is not feasible for an individual to purchase a fire department or roadways, so local taxes pay for these types of government programs.

The problem the US has is that it has overstepped it boundaries in what the government will pay for. It has created much too many social programs that use taxes merely as transfer payments from people that work to people that do not work. This is extremely inefficient as it creates an incentive not to work, or to not use existing skills, or to work as hard/much.

Paying taxes to pay for things that protect our country is a very good thing, while paying taxes so others do not need to work is a bad thing.

[Ron~Popeil]

The government right to impose taxes does not stop with fiat.

When you buy a car or a house you will owe taxes on this property.

Taxes should be used to fund government functions that cannot easily be done on an individual level. One example of this is national security/defense. It is not feasible for an individual to purchase national security so taxes should be paid to the government to fund the DoD, military, DHS and similar agencies. The same concept for consumer protection agencies like the SEC, law enforcement for the FBI.

On a local level, it is not feasible for an individual to purchase a fire department or roadways, so local taxes pay for these types of government programs.

The problem the US has is that it has overstepped it boundaries in what the government will pay for. It has created much too many social programs that use taxes merely as transfer payments from people that work to people that do not work. This is extremely inefficient as it creates an incentive not to work, or to not use existing skills, or to work as hard/much.

Paying taxes to pay for things that protect our country is a very good thing, while paying taxes so others do not need to work is a bad thing.

Ideally government only has the right to do what we tell it to do. Hopefully bit coin is the thing that gets us back to that.

[Harley997]

Your point is not logical.

Technically true that currency is a "product" that is produced by the government (it is really a store of value and way to transact business that is endorsed by the government).

You must pay sales taxes on most things you purchase and property taxes on your house.