In a society where governments and big business are in cahoots, prioritizing their powerful positions, lavish lifestyles and ever growing profits over the well being of the constituencies that gave them their lofty positions in the first place, bitcoin and alt-coins represent breathing room, a chance to escape from under the thumb of the powers that have screwed us over for decades, if not centuries.
Pardon the rude language and the unnecessarily long and clumsy sentence in the introduction above. It's just that I get angry when news like what I'm about to share with you reaches me. The TLDR is this: the U.S. House of Representatives have just passed a bipartisan bill that contains a cryptocurrency tax reporting requirement that is likely to affect all Americans who are active in the crypto-sphere. This is an outrage. Now, don't get me wrong here: I'm not against taxation. Taxation is, in my opinion, the price of admission we pay to take part in a functional and organized society with roads, schools, access to healthcare and so on. Also, as long as we live under capitalism, where the natural tendency is to concentrate wealth and power in the hands of a few winners who get to rule over the 99 percent losers, taxation is necessary to redistribute wealth and power in order to maintain at least the appearance of a just society. The idea behind taxation is alright, but there are right and wrong ways to go about its implementation, and what I'm about to share with you is the wrong way. That's business as usual, unfortunately.
Let me first explain to you something that should be obvious, just in case you've missed it: insanely rich individuals and insanely large multinational corporations tend to skip out on paying their fair share of taxes. They have an army of expensive lawyers and accountants that exploit every loophole known to mankind, they move their wealth abroad, to tax-havens, and they don't pay income tax. When you hear, as we occasionally do, some billionaire CEO proclaiming that they will accept an annual wage of $1.00 (one dollar), they're full of it. Why? Because their wealth isn't measured in wages, but in assets and the income generated by those assets; that income is taxed at a far lower rate, and often is stored at a far away location where they pay even less or nothing at all. Amazon paid $0.00 federal income taxes in 2018 and instead collected a $129 million tax rebate from the government. Furthermore, American citizens subsidize Amazon with their tax dollars because a large part of their workforce relies on the social safety net due to the low wages paid to them. The same goes for Walmart, Costco and so on. If that doesn't make you angry, just stick with me.
Why Rich People Are The Reason America Is Broke | The Amber Ruffin Show
The Treasury Department published a document in September called The Case for a Robust Attack on the Tax Gap. So, what is the tax gap?
Today, the “tax gap”—the difference between taxes that are owed and collected—totals around $600 billion annually and will mean approximately $7 trillion of lost tax revenue over the next decade.
source: U.S. Department of the Treasury
Now, who do you think the IRS will haunt to close this gap? You've guessed it; the citizens at the lower rungs of the wealth and income pyramid. They refuse, as they've done for decades now, to go after the millionaires and billionaires. The video linked above is funny, but its message should make you angry. As stated in the video, the IRS spends a disproportionate amount of their time and resources chasing down the people who make the least money. Prime among their targets are the people who claim the "Earned Income Tax Credit," which was created to refund tax money to the working poor. If you claim the earned income tax credit, you're more likely to face IRS scrutiny than someone making twenty times as much. I love the comparison made in the video: it's like Batman deciding to let the Joker go so that he can focus on some guy fishing without a license. That's crazy...
Now, on to the relation with us, crypto-heads. We are the little people who discovered a way out of this criminally unjust game. But with this latest bipartisan infrastructure bill, the powers that be will attempt to close the small freedom loophole gifted to us by Satoshi Nakamoto. The bill will cost $1 trillion and has provisions that will help pay for it. The crypto-specific provision would raise $28 billion, and consists of an amendment to a law that was written nearly 40 years ago that applies to in-person transactions of $10,000 and more. The amendment "essentially requires recipients to verify the sender’s personal information and record their Social Security number, the nature of the transaction and other information, and report the transaction to the government within 15 days." And non-compliance will amount to being a felony, with the risk of jail-time. There are problems though with the implementation of this law:
Unlike other tax code violations, violations of 6050I are a felony, and some lawyers have pointed out that, applied to cryptocurrencies and other digital assets like non-fungible tokens (NFTs), the law could be nearly impossible to comply with.
source: CoinDesk
This makes me so angry... It's not that I'm worried yet. I mean, crypto can't be stopped, the cat is out of the bag, Pandora's box can't be closed. But laws like these will set back the development of financial technologies and blockchain innovation in America. And we know that the rest of the developed world tends to follow in America's footsteps. Again, it's not that I'm against taxation, it's that I'm against the powers that are against my freedom. Freedom, if it means anything, has one crucial requirement, and that's that wealth and power should be distributed as egalitarian as possible and that the rules apply to each and everyone of us equally, but they clearly don't. I can understand KYC requirements for centralized exchanges (which is why we should all embrace the advent of decentralized exchanges) and other brokers, but this bill essentially expands the term "broker" to encompass literally all of us. And you might think that there's nothing to worry about because we, little people, won't transact sums of $10,000 or larger. Well, we'll speak again when, as a consequence of rampant inflation, $10,000 is just enough to buy yourself a good meal...
BREAKING: Joe Biden is About to Cancel Cryptocurrency in the USA!? (500M+ Reddit Users INCOMING)
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