The importance of compliance from a risk vs benefit perspective
Compliance as a means of reducing risks
Many people in the crypto-space are crypto-anarchists. These individuals will often internalize concepts such as "taxation is theft". The truth is that money is not just lost through taxes but also through legal fees. The cost benefit analysis approach to asset protection is not influenced by ideology as the goal is to reduce costs and increase benefits. Compliance is a means to an end and if the goal is to keep as much of your wealth as possible then it is cheaper a lot of the time to do the necessary paper work and go by the book.
Compliance as an asset protection strategy
The risk vs benefit approach led to the conclusion that compliance is necessary (from a business efficiency perspective). The cost of trying to cheat on taxes from an economic and time perspective is not worth it when those taxes can be paid. In other words paying taxes is purchasing peace of mind. It is not necessary to agree with the activities of the government, just as when driving it is not necessary to agree with the owner of the toll, but it is necessary to pay the owner just so as to ride through. Paying taxes on crypto is paying the cost for not having to worry about an IRS audit, or getting the door kicked in for some raid, or being investigated. It's easier to pay up now than to pay up later and the more money you are looking to make in crypto the more this begins to make sense.
Millionaires are being made in this crypto space today and the millionaires who pay taxes have a much higher probability of keeping their money. It's not enough to simply acquire assets but it is important to protect them. Compliance is an asset protection strategy.
An area in which most people lack is asset protection. It can be complicated and may seem difficult, but ensuring that you’ve done it right is more than worth it. To protect yourself effectively, you need to have the right strategy in place, which includes
Which includes what?
absolutely agree with you!
people often spend time on searching ways how to avoid anything and as a result lose much more than if they just face and do it.
it's similar to customers who have a strong desire to dave money, not even money, just a few coins and they spend hours to go to that far place where something costs a few coins less. Result - funny small saving and huge amount of lost time. Time is the most expensive thing in the life.
It's better to spend money (buying more expensive things or paying taxes) but to save Time! and your nerves)
I think taxes are necessary but everything depends on the tax rate. Thank you for this informative post @dana-edwards.
it would be nice that taxes were minimal, then everything would be fine
If you are making millions or have the potential to make millions then you have a lot more to gain than to lose by hiring whoever you have to hire to help you keep as much of your gains as possible. People who outright refuse to pay taxes are going to have to live a life on the run.
taxes naturally have to be paid, because these funds are kept by budget organizations. the main thing is that tax rates are within reasonable limits
I agree. If one is thinking about not paying taxes, go all-in or don't go, meaning, start a revolution or pay your taxes. The rule of law is also an important concept in this sphere, and if someone is not paying their taxes, the burden increases for the rest that are. So, yes, if you're not paying your taxes out of ideology, then bring it to the next level, or else you're just going to live with fear of going to jail.
Though tax payments is a civic responsibility but I think that voluntary tax payment which saves one from some embarrassments will improve if Governments improves on the methods of collecting taxes.
@dana-edwards Taxes are necessary and essential for our technology to progress and our economy to thrive. Excessive taxation is indeed theft and that's another story.
But our countries' infrastructure would be non existent without taxation. Road networks, airports, harbours, telecommunication networks, public hospitals and so on wouldn't be available without taxation. We woudln't have constructed huge cargo ships and long railways without taxes. Because all of those mentioned above need funding.
Again, there's a difference between reasonable taxation and theft.
You have made some good points there. I checked on the net for more info about importance of compliance and found most people will go along with your views .
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This has been a really wonderful post. Many thanks for supplying these details. Thankx @dana-edwards
I would much rarther feel secure than be stressed out and afraid of what could happen if I'm not paying taxes. While I do believe that taxes are basically theft, not paying them could cause way more problems if you're investigated.
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