BITCOIN AND TAX EVASION: BRINGING ‘UNDER THE TABLE’ INCOME ONLINE

NEW YORK (InsideBitcoins) – While bureaucrats and venture capitalists are embracing the idea of a regulated, controlled Bitcoin industry where money laundering and other forms of financial crime can be limited, there is an undercurrent in the Bitcoin economy that wants no part of this so-called ‘mainstream adoption.’ As more centralized Bitcoin services, such as Circle and Coinbase, continue to bring greater transparency to the blockchain, other projects, such as Zerocash and Dark Wallet, are working to preserve the original implications of Satoshi Nakamoto’s invention.
At its core, Bitcoin is about privacy and censorship-resistance, and it becomes difficult to enforce certain financial regulations and laws when you can’t track every online transaction. It’s possible that the cypherpunks were right when they predicted the idea that untraceable cash could lead to a society where taxation becomes nearly voluntary.
Why do people evade taxes?
In reality, you don’t need to be an anarchist to understand the benefits of tax evasion. When you don’t get caught, evading taxes allows one to enjoy the fruits of their labor without having to pay for public roads, education, national defense, and all of the other services currently provided by various governments around the world. Tax evaders don’t avoid paying taxes because they’re anarchists, they avoid paying taxes because they don’t want to give away money without much say in what they get in return.

This post was published at Inside Bitcoins on Oct 14, 2014.