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This shows how little cryptocurrency users know about how governments collect taxes. The government doesn't go around checking people's bank accounts in order
by lottin 5y ago
This shows how little cryptocurrency users know about how governments collect taxes. The government doesn't go around checking people's bank accounts in order to get tax information. This would be terribly inefficient. What they do instead is pass laws that require employers to disclose how much they pay their employees and to collect taxes on their behalf, before the taxpayer even receives the money. Therefore private transactions and 'unconfiscatable' money does nothing to prevent governments from collecting taxes, at least as far as ordinary people are concerned.
- kybernetyk 5y agoThat’s an edge case for payroll taxes/income tax of employees. All other forms of taxation can be avoided by the common man.
- pasquinelli 5y agothat edge case is most of the tax the common man pays
- lottin 5y agoNot at all an edge case, but there's no point discussing this. If you think you can avoid all other forms of taxation, I say go ahead and try it!
- qeternity 5y ago> All other forms of taxation can be avoided by the common man. Lol, the common man isn’t really subjected to other forms of taxation. Most people pay two kinds of taxes: income tax, and sales/use taxes (with property tax being a distant third). The most common taxes are difficult to dodge.
- tifik 5y agoYou are talking about income tax. There are other taxes, e.g. capital gains tax, that most crypto makes much more difficult for governments to collect.
- lottin 5y agoAll income that you receive from or is routed through an institution will be handled in the same way. This likely includes interest, dividends and capital gains as well. Then there's VAT which is also collected by businesses on behalf of the government.
- tifik 5y agoExactly. Crypto largely removes the need for institutions, and with anonymous wallets it would be very difficult to link a specific person to one. Edit: I am again talking about capital gains. Yes, the money has to come from somewhere, but you can break the traceability easily by using non-kyc means of getting crypto. E.g. bitcoin ATMs.
- lottin 5y agoA bitcoin ATM is an interface with an institution that is selling/dispensing dollars, so you're still dealing with an institution.
- SpaghettiCthulu 5y agoYeah, but you don't need a bitcoin ATM. The grocery store could accept monero and there would be no need for fiat currency.
- lottin 5y agoSure, and if pigs could fly, there would be no need for helicopters.
- R0b0t1 5y agoFor salary or wage payments, kind of. If you received your normal wages in XMR then the government would have a hard time proving anything illegal is happening, even if both your employer and you are breaking the law.
- quantumBerry 5y agoYou mean the government may have to rely on old fashioned police work, like undercover agents or informants witnessing the illegimate activity rather than passively spying on financial transactions? Say it ain't so!
- lottin 5y agoIf your employer wants to help you committing tax fraud, they would have to cook the books, which is a lot of work and entails a considerable amount of risk. Whether they pay you with a cryptocurrency or real money doesn't make any difference, as far as I can see.
- R0b0t1 5y agoNo, they can just not withhold your tax obligation. Mandatory withholding is not even the norm -- KS and MO don't require it, it seems only Eastern seaboard states and maybe CA do. People keep walking this back to massive fraud but more likely what anonymity will do is just allow businesses to escape onerous operating issues. E.g. having employees in some states is worse than having them in others because of those state's perceived requirements to operate an LLC in that state, and other related rules. It's not even clear if some of these requirements are enforceable federally.
- lottin 5y agoNot withholding the tax is not enough. Both the employee and the employer have to lie to the government for this to work, and for an employer this means they need to falsify their financial records, because the tax agency can demand to see them. Also, anonymous transactions already exist, so cryptocurrency doesn't make this type of fraud easier or more likely.