Hello Steamians and CryptoLovers...
Tonight I would like to has a discussion on CryptoCurrency Taxation. The following will be keys point to why CryptoCurrency Taxation is BS.
- Why it shouldn't be treated like stocks,
- How can Governments Tax something they do not own
- DO GOVERNMENTS THINK IT WILL BE EASY TO TAX?
WHY CRYPTOCURRENCIES CAN'T BE TREATED LIKE STOCKS
I often read in articles saying that cryptocurrency tokens are like buying shares in a company on a stock exchange. I would say Yes and No. Yes because you are giving a company an wealth for tokens. These Tokens how ever do not represent equity. Participants do not own any equity in the company what so ever.
Here is the problem of this view. On a stock exchange you cannot trade one stock for another without first trading it into cash of the local currency. When this happens there is a net gain or loss. This is information that is used when doing taxes. And you will pay taxes in the local currency.
Now with Crypto Currency the main difference is that you can exchange a coin for a coin without first liquidating into a government owned currency. It is completely bypassed since it is in a whole different system. Never will you beable to trade a stock for a stock, or a stock for consumer goods or services. This doesn't happen with stocks...but it happens with crypto currency all the time.
The regulators are even having a hard time classifying Cryptos. They call it a security, some call it money, some call it property. They really don't know what they are talking about and that is the problem. They are so desperate to tax something out of their control...they will label it whatever they have to in order to get their hands in the cookie jar.
How can Governments Tax Something they do not Own?
So let's say they tax cryptocurrencies...Which they will. My question is do they even have the right to tax it? Is it even possible to tax.
Do governments have the right to tax something they were literally calling a fraud no less then 6 months ago? Then lets say they tax it. What are they going to make you do to pay taxes. Force liquidate you from crypto land into their currency system?
The talking heads say that anything you go from one coin and buy other coins...this is a taxable event. I say BS.
Why? Simple they are treating and viewing crypto land as a stock market. The only thing is we never liquidated into a government currency before trading for another coin. Therefore nothing should be taxed while being in cryptoland.
Taxes should only be imposed when liquidating into the local currency system. It's not like the government accepts bitcoin or ether as payments for tax.
DO GOVERNMENTS THINK IT WILL BE EASY TO TAX?
This will be an uphill battle for governments here. The reason being is there are no tax crypto zones popping up all over the world with Belarus and puerto rico becoming the favourite tax free havens for crypto investors that have made a ton of wealth.
That's one problem they face. The second problem is that cryptocurrency loves privacy. Yes they can figure out where the bitcoin and a bunch of other currencies have come from. I even hear they can somehow track Monero and that is suppose to be like digital cash where it has a bunch of signatures on it so it can't be identified who it came from.
However their are new crypto currencies that fix that problem with END TO END ENCRYPTION.
Zencash is a new crypto developing by a few army intelligence officers that found weak points in previous cryptocurrencies and made their own. This coin is apparently untraceable.
So with coins with properties like that it will become impossible for governments to fully track and tax people using crypto currency.
In closing... It will be interesting to see how the government will conduct its leeching VAMPIRE ways. They will try and control it...but cryptos will evolve and leave governments behind. They just need to set up shop in a favourable crypto tax jurisdiction.
If governments aren't careful they will piss off and lose much capital and possibly citizens looking for a tax free way to keep their new found crypto Wealth.
It's hard if not impossible to tax something you don't own or control.
If you liked please upvote...if you have any other points of view...I would like to discuss and debate them.
Please UPVOTE