6 ms·

To regulate and tax, you must first know someone has bitcoins. Furthermore, you must know how much they have or have an opportunity to effectively find that out

by snitko 12y ago

To regulate and tax, you must first know someone has bitcoins. Furthermore, you must know how much they have or have an opportunity to effectively find that out. Now, with a bank account it's not a problem: all IRS or some other three letter agency has to do is call a bank. Who are they gonna call with Bitcoin? Bitcoin CEO? How does an IRS agent know I made 50 and not 25 bitcoins? How can the government impose capital controls on my money and prevent me from buying stuff in Iran or some other country to which sanctions are applied? It's not a wet dream. It's reality. You can't control Bitcoin. You can only control people and even that is not done very effectively in the real world, as proved by numerous criminals, tax evaders and expats. Bitcoin makes doing stuff government doesn't like easier. That is all you have to know.

vertex-four 12y ago
The moment you buy anything with those bitcoins, it's obvious. You think the IRS wouldn't know you have a car if you never told them? A piece of land? Worst case scenario, they hire more people to go out into the field and audit people. Basically, you can only ever keep bitcoins without the IRS knowing about it if you never spend those bitcoins. When you spend them, the IRS will eventually know about it.
- snitko 12y ago
  The moment I buy anything within the country. Or something that requires my ID. But what about things like breakfast? Or a taxi ride? The IRS cannot track cash with which you buy small things, nor will it be able to track bitcoins. I mean, theoretically it can be possible, but the effort it would have to put into that kind of surveillance is not worth the profit it would receive. Besides, who talks about spending? If I made money and want to hoard them, I still have to pay IRS the next year? Well, not so with Bitcoin. IRS may as well starve to death waiting for me to spend them.
  - lclarkmichalek 12y ago
    A currency you can't spend is... well, not great. Regardless, I'd take a bet that the IRS can wait for you to spend your bitcoin/be discovered and prosecuted for tax fraud.
  - vertex-four 12y ago
    Sure, small things will probably be too much effort to tax. They'll just tax the shopkeeper instead of you, though, and set up really nasty fines for incorrect bookkeeping. Same as most things. Trying to avoid taxation entirely would involve a complete lifestyle change for everybody; somehow, everybody would have to be small-scale producers and buy things from other small-scale producers, while we're now used to the ease of buying things all from one place. I'm not entirely certain such a lifestyle change is a good thing, as it ends up with me and many others like me (as a minority which still suffers a lot of societal harm even in a very liberal country) losing a huge amount of legal protections against those who seek to harm me or segregate me. What happens the next time everyone decides some minority is the root cause of all their problems? And if you don't want to spend, don't spend. I think most people will end up spending before the IRS disappears, though. What's the point of having money if you're doing nothing with it? Money isn't an end goal for most.
    - snitko 12y ago
      > Trying to avoid taxation entirely would involve a complete lifestyle change for everybody; somehow, everybody would have to be small-scale producers and buy things from other small-scale producers, while we're now used to the ease of buying things all from one place. Not necessarily. If there was no IRS and taxes, everything would be almost the same, except cheaper. And who do you suppose the IRS gets their biggest share of revenue from anyway? It's not the rich. It's the middle class. The rich can already afford expensive schemes for tax evasion. Now the middle class will also be able to hide some of their savings from the IRS. And again, "not spending" is not necessarily a bad thing. In fact, with a deflationary currency, it's a good thing, since it incentivizes thoughtful investment in things that are truly important. The point of having money and not spending it is a very important point: you have security for you and your family, you also have an opportunity to wait until something truly great comes up in which you can invest the money. With Bitcoin, you also don't have to fear inflation. > What happens the next time everyone decides some minority is the root cause of all their problems? Next time this happens, government uses your own money it collected from you in the form of taxes to satisfy the irrational attitude of those who hate this or that minority. People on their own hating blacks, or gay or mexicans cannot do much, but government provides them with instruments of oppression and the beauty of it is that those instruments are paid for by all the people, not just those with this irrational attitude. Market competition will simply eradicate those companies who discriminate against minorities, because their competitors would hire minorities for slightly less and provide cheaper products. Government has nothing to do with protecting the minorities. In fact, historically, it was government laws that prevented minorities from succeeding. I highly recommend Thomas Sowell books on that subject where he provides examples from all over the world on the subject of minorities.
  - hnnewguy 12y ago
    >who talks about spending? Spending is the purpose of money. It's a means of transaction. It isn't an asset, and there is no need to hoard it. How is that productive? >IRS may as well starve to death waiting for me to spend them. Well, if everyone thinks like that, that's a terrible monetary system. If I want to trade my car for Bitcoin, where do they come from? I have to keep bidding them up until I find someone to sell them to me? The advantage of cash is that it's abundant.
    - snitko 12y ago
      Hoarding is productive because if you're incentivized to hoard (as with Bitcoin) that means you will only most likely invest in projects you truly want to invest for some reasons: either because people really need the product you are going to produce and will pay money, making this whole enterprise profitable or because you always wanted to be an innovator and do something amazing. However, since you no longer have to spend simply because you fear inflation will eat your money, this means you're not going to invest in useless projects of digging holes or buying useless luxury things for yourself. Deflationary currency incentivizes healthier lifestyle free of consumerism. Spending is not good and isn't the point of currency. The point of currency is to allow people to BOTH do transactions and save. I guarantee you that if the US removed all regulations on currencies, Bitcoin would take over in a couple of years as a national currency, making it obvious that USD is forced upon us.
      - hnnewguy 12y ago
        >that means you will only most likely invest in projects you truly want to invest for some reasons So, precisely how it works with cash. >The point of currency is to allow people to BOTH do transactions and save. I'm not sure you understand what "saving" is. Considering that you likely work in an industry that relies on putting other people's capital to work, you would think that you'd appreciate a monetary system that incentivises such activity. I do. >However, since you no longer have to spend simply because you fear inflation will eat your money I don't fear this. Whatsoever. Because I don't stuff my money in a mattress for decades. Since the Fed introduced the inflation mandate in the 70s, inflation has been low. I don't care if a candy bar is $1 now, instead of $0.10. I'm far wealthier and can purchase far more candy bars. The absolute value of a dollar is irrelevant to me. >I guarantee you that if the US removed all regulations on currencies, Bitcoin would take over in a couple of years as a national currency Utterly delusional. 99.9% of the population has no problem whatsoever with the USD, myself included. Outside of paying taxes, US citizens can use whatever they want in exchange. Are people stopping you from using Euros or blueberry scones right now? Please tell me the regulations preventing such activity. We have many big economic problems to solve. Money isn't one of them.

by snitko 12y ago

vertex-four 12y ago

The moment you buy anything with those bitcoins, it's obvious. You think the IRS wouldn't know you have a car if you never told them? A piece of land? Worst case scenario, they hire more people to go out into the field and audit people. Basically, you can only ever keep bitcoins without the IRS knowing about it if you never spend those bitcoins. When you spend them, the IRS will eventually know about it.

snitko 12y ago
The moment I buy anything within the country. Or something that requires my ID. But what about things like breakfast? Or a taxi ride? The IRS cannot track cash with which you buy small things, nor will it be able to track bitcoins. I mean, theoretically it can be possible, but the effort it would have to put into that kind of surveillance is not worth the profit it would receive. Besides, who talks about spending? If I made money and want to hoard them, I still have to pay IRS the next year? Well, not so with Bitcoin. IRS may as well starve to death waiting for me to spend them.
- lclarkmichalek 12y ago
  A currency you can't spend is... well, not great. Regardless, I'd take a bet that the IRS can wait for you to spend your bitcoin/be discovered and prosecuted for tax fraud.
- vertex-four 12y ago
  Sure, small things will probably be too much effort to tax. They'll just tax the shopkeeper instead of you, though, and set up really nasty fines for incorrect bookkeeping. Same as most things. Trying to avoid taxation entirely would involve a complete lifestyle change for everybody; somehow, everybody would have to be small-scale producers and buy things from other small-scale producers, while we're now used to the ease of buying things all from one place. I'm not entirely certain such a lifestyle change is a good thing, as it ends up with me and many others like me (as a minority which still suffers a lot of societal harm even in a very liberal country) losing a huge amount of legal protections against those who seek to harm me or segregate me. What happens the next time everyone decides some minority is the root cause of all their problems? And if you don't want to spend, don't spend. I think most people will end up spending before the IRS disappears, though. What's the point of having money if you're doing nothing with it? Money isn't an end goal for most.
  - snitko 12y ago
    > Trying to avoid taxation entirely would involve a complete lifestyle change for everybody; somehow, everybody would have to be small-scale producers and buy things from other small-scale producers, while we're now used to the ease of buying things all from one place. Not necessarily. If there was no IRS and taxes, everything would be almost the same, except cheaper. And who do you suppose the IRS gets their biggest share of revenue from anyway? It's not the rich. It's the middle class. The rich can already afford expensive schemes for tax evasion. Now the middle class will also be able to hide some of their savings from the IRS. And again, "not spending" is not necessarily a bad thing. In fact, with a deflationary currency, it's a good thing, since it incentivizes thoughtful investment in things that are truly important. The point of having money and not spending it is a very important point: you have security for you and your family, you also have an opportunity to wait until something truly great comes up in which you can invest the money. With Bitcoin, you also don't have to fear inflation. > What happens the next time everyone decides some minority is the root cause of all their problems? Next time this happens, government uses your own money it collected from you in the form of taxes to satisfy the irrational attitude of those who hate this or that minority. People on their own hating blacks, or gay or mexicans cannot do much, but government provides them with instruments of oppression and the beauty of it is that those instruments are paid for by all the people, not just those with this irrational attitude. Market competition will simply eradicate those companies who discriminate against minorities, because their competitors would hire minorities for slightly less and provide cheaper products. Government has nothing to do with protecting the minorities. In fact, historically, it was government laws that prevented minorities from succeeding. I highly recommend Thomas Sowell books on that subject where he provides examples from all over the world on the subject of minorities.
- hnnewguy 12y ago
  >who talks about spending? Spending is the purpose of money. It's a means of transaction. It isn't an asset, and there is no need to hoard it. How is that productive? >IRS may as well starve to death waiting for me to spend them. Well, if everyone thinks like that, that's a terrible monetary system. If I want to trade my car for Bitcoin, where do they come from? I have to keep bidding them up until I find someone to sell them to me? The advantage of cash is that it's abundant.
  - snitko 12y ago
    Hoarding is productive because if you're incentivized to hoard (as with Bitcoin) that means you will only most likely invest in projects you truly want to invest for some reasons: either because people really need the product you are going to produce and will pay money, making this whole enterprise profitable or because you always wanted to be an innovator and do something amazing. However, since you no longer have to spend simply because you fear inflation will eat your money, this means you're not going to invest in useless projects of digging holes or buying useless luxury things for yourself. Deflationary currency incentivizes healthier lifestyle free of consumerism. Spending is not good and isn't the point of currency. The point of currency is to allow people to BOTH do transactions and save. I guarantee you that if the US removed all regulations on currencies, Bitcoin would take over in a couple of years as a national currency, making it obvious that USD is forced upon us.
    - hnnewguy 12y ago
      >that means you will only most likely invest in projects you truly want to invest for some reasons So, precisely how it works with cash. >The point of currency is to allow people to BOTH do transactions and save. I'm not sure you understand what "saving" is. Considering that you likely work in an industry that relies on putting other people's capital to work, you would think that you'd appreciate a monetary system that incentivises such activity. I do. >However, since you no longer have to spend simply because you fear inflation will eat your money I don't fear this. Whatsoever. Because I don't stuff my money in a mattress for decades. Since the Fed introduced the inflation mandate in the 70s, inflation has been low. I don't care if a candy bar is $1 now, instead of $0.10. I'm far wealthier and can purchase far more candy bars. The absolute value of a dollar is irrelevant to me. >I guarantee you that if the US removed all regulations on currencies, Bitcoin would take over in a couple of years as a national currency Utterly delusional. 99.9% of the population has no problem whatsoever with the USD, myself included. Outside of paying taxes, US citizens can use whatever they want in exchange. Are people stopping you from using Euros or blueberry scones right now? Please tell me the regulations preventing such activity. We have many big economic problems to solve. Money isn't one of them.