You know what, this narrative is funny, because 99.999% of the time in which "crypto" is used to evade taxes, it's the kind of taxes that would need to be paid because of capital gains on the crypto assets because their value increased. But most of the time, they are unrealized gains, which means that tax evasion didn't actually happen. But anyway, let's now think of the cases where the person sold the crypto back to fiat: how easy is to evade taxes at that moment? Not very, because most exchanges report trades to authorities.
And anyway, the fact that their crypto balance increased is due ultimately to politicians doing QE! So they tax us in a hidden-way via money-printing, and after the scarce assets increase in value because of this, they want to tax us again.
The big problem comes when they want to use their crypto horde to buy real world stuff.
Want to buy a house? Now you need to convert your crypto into fiat and a deed transfer. People will start asking where your funds are coming from. This is where you tend to get caught.
> People will start asking where your funds are coming from.
This is a weird statement.
If it's a cash offer, it's a seller's job to determine if you have the money, not if you paid taxes on it.
If it's a mortgage down payment, then the bank is more interested in if your assets are going to disappear (e.g. are they actually a loan from a third party?). I've never had a mortgage bank inquire about my tax situation.
If you're talking about IRS audits... then yes, they might be curious how you purchased a giant asset without any declared income. But that's similar to any unreported income situation.
>> People will start asking where your funds are coming from.
>This is a weird statement.
Not in the UK. Here there's a legal obligation on the conveyancing practitioner - which you have to use - to confirm the source of funds for the purchase. They "will ask questions about your salary, request bank statements and ask you to give details of any family inheritances"[1].
> If it's a cash offer, it's a seller's job to determine if you have the money, not if you paid taxes on it.
Yes, but your bank and the bank of the seller both have strict KYC/AML rules to respect. And the seller probably doesn't want to accept a pile of bills that requires laundering.
It's certainly more morally complex than just scamming somebody. Money is property. People generally agree that once you earn your money, it belongs to you. Is the government automatically entitled to part of it? The Boston Tea Party, the Women's Tax Resistance League, and Gandhi's Salt March are a few examples where people said no.
Usually in this context the "evaders" will refer to it as tax resistance or tax protest. It is a form of civil disobedience. The government being disobeyed, of course, is unlikely to see it that way, and in a modern context, would call it evasion. https://en.m.wikipedia.org/wiki/Tax_resistance
The Indian example is especially poignant because refusing to pay salt taxes was one of their key strategies for achieving independence from the British, and they managed to do it without firing a shot. So yeah I'd say refusing to pay the salt tax was a big win morally and probably saved a lot of lives.
What the best examples typically have in common is that the government in question didn't possess the consent of the governed. In the case of the British WTRL the refrain was "No vote, no tax." If the government won't let women vote then what right does it have to tax them? Women weren't able to indicate consent (or lack thereof) via the political process, and they were ultimately successful in their argument that this taxation without representation was unjust. Incidentally this line of thinking was expanded upon decades later across the pond in the US, which ultimately decided via the 26th amendment that it was immoral to draft men into the army when they were still too young to vote, and lowered the voting age to 18.
> Is the government automatically entitled to part of it? The Boston Tea Party, the Women's Tax Resistance League, and Gandhi's Salt March are a few examples where people said no.
Your argument doesn't make sense. The example you cite are examples of protest against unjust taxation not that "the government is not entitled" to any of my crypto. As you yourself elaborate in the following paragraphs. Are you seriously suggesting parallels between the crypto bros and Gandhi in that they are both participating in civil disobedience? Oh. Please.
And SBF is just a modern day MLK because both are referred to by TLAs!
I think it makes perfect sense in its immediate context, my parent asked a question about the morality of tax evasion, I gave some examples where there was wide consensus that people not paying their taxes was moral, but it still would have been referred to as evasion. Other people were bringing up examples of tradesmen and stuff, not just crypto. I will leave it to the federal government to render the final verdict on SBF but he ain't got shit on Gandhi, that's for sure.
Your examples of tax protest were by people who didn't really want to be a part of the government they weren't paying taxes to, or felt they weren't being treated properly as a class.
This doesn't seem to want crypto or finance exchanges. Thistle people just want the benefits of the government without paying for it.
The subject of tax evasion comes up and invariably some flathead has the gall to point at folks that actually work for a living. Like they aren't a rounding error compared to corporate interests and oligarchs in this context.
Tax evasion is people stealing from you, just in an indirect way. Just because some people already steal from us doesn't mean it's OK for other (richer) people to steal even more from us.
You may believe there's a better way for the government to tax us, but that's not how the system works currently.
Crypto being used for tax evasion is a good reason for it to be regulated out of existence.
Crypto scales a lot better than cash, and allows for considerably larger amounts of fraud, and not just locally, but also internationally.
I also think that businesses avoiding tax by not reporting cash are putting themselves into an unfair position against businesses that are legally operating, and I'd have a preference that businesses doing this should be shut down. If you're running a thin margin business and your competitor is able to price themselves better by committing tax fraud, then you need to also commit tax fraud to compete, and that's a race to the bottom that's not good for anyone.
But a system that takes the concept of ledgers, and makes it tied to pseudonymous addresses instead of persons, is distributed across the world, resilient to tampering, and which gives its users control over their money, and which has been in use for 15 years is
1. “Not innovative”, and
2. That in the span of 30,000 years that 15 years is enough time to really tell if this is something that will survive or if it’s just a dumb idea that will die out.
I think that Bitcoin is a wonderful system, and I think that more people should take time to study Bitcoin in detail. Do not let the crypto bros and the people that only care about measuring Bitcoin in dollars distract you from the real point of Bitcoin.
> But a system that takes the concept of ledgers, and makes it tied to pseudonymous addresses instead of persons, is distributed across the world, resilient to tampering (...) is 1. “Not innovative”
Well, it is innovative, in the same sense a jet engine is. What you don't do with jet engines is using them to keep static structures in the air indefinitely. You use steel beams or concrete for that.
Crypto tech as cash alternative is pretty much jet engine as a steel tower alternative.
Beer has been a thing for ~5,000 years but we've only had beer hats for the last 28. Our society could benefit from extensive investment into ongoing research and development of beer hat related industries, as we clearly haven't had enough time to determine if they're bullshit novelty garments.
The difference between cash and crypto is like the difference between building a room on top of a tall tower, vs. strapping a few jet engines to it and pointing them downwards. Both methods solve the same problem - but one does it mostly passively, while the other one wastes absurd amount of energy simulating the same thing you normally get for free.
So the point is that a large amount of people think that banning cash would be completely absurd and therefore this isn't just some issue that is relegated to obscure crypto fans.
A friend of mine got hooked on something really bad. We could all see his health deteriorate month by month. He's probably dead right now. Even his parents don't know where he is. He's son will grow up without a father.
I never met his dealer, but I'm sure the dealer saw the decay and did nothing.
The fact that the dealer saw the decay and did nothing is related to the drug's illegality. If the drug were available in a dispensary where you had to go out in public and get your drug, there would be more opportunities for intervention. We already make it illegal to serve alcohol to someone visibly drunk. You can't apply rules like that when the transactions are occurring in the dark.
Is this a joke? There isn't a gas station in this country that will refuse to sell booze to a homeless broken down and busted up alcoholic that begs for change right in front of the gas station. Except of course, the gas stations that legally aren't allowed to sell booze to anybody in the first place.
Dealers have no morals. Even the law that bartenders aren't allowed to serve drunk people is an absolute farce. Walk into any bar in this country and you'll find drunk people being served alcohol.
Yes, that’s the crypto use case. Make a ledger a billion times less efficient than an ordinary ledger, so that you can circumvent regulations (until the regulator catches up).
Crypto is also used to evade taxes. I'm not saying it's a good thing, but it's not as bad as dealing drugs or scamming people.