Are cryptocurrencies free from taxation from the state?
We have fiat money; paper money made legal tender by a government decree, and we have cryptocurrencies which operate independently from a central bank using military grade encryption. Cryptocurrency is currency of the people, not of the state.
So should we ever pay taxation to the state from our cryptocurrencies?
They came to him and said, "Teacher, we know that you are a man of integrity. You aren't swayed by others, because you pay no attention to who they are; but you teach the way of God in accordance with the truth. Is it right to pay the imperial tax to Caesar or not? Should we pay or shouldn't we?"
But Jesus knew their hypocrisy.
"Why are you trying to trap me?" he asked. "Bring me a denarius and let me look at it."
They brought the coin, and he asked them, "Whose image is this? And whose inscription?"
"Caesar's," they replied.
Then Jesus said to them, "Give back to Caesar what is Caesar's and to God what is God's."
And they were amazed at him.
Mark 12 14-17 NIV
What this shows us is that fiat money is for the government, but our cryptocurrency is ours. When I have my paper notes in my pockets, it's the Queen's face down there, but when I have my Cryptocurrency they are flying in the sky with Satoshi.
Are cryptocurrencies free from taxation from the state?
“If taxation without consent is not robbery, then any band of robbers have only to declare themselves a government, and all their robberies are legalized” - Lysander Spooner
Conclusion: Cryptocurrencies are legally free from taxation from the state. The government is acting ultra vires if it attempts to tax cryptocurrencies.
these questions always been in the back of my mind...
seems the general consensus is, it becomes taxable when you convert to fiat.
of course, you could load up a Bitcoin wallet and spend from there, trying to dodge around it - though still, that might be dangerous territory, as if it ever was taken to court, it could probably be considered still as a conversion to fiat and thus under obligation to pay taxes.
not great news. but is what it is for now. :-/
In the U.S., at least, I thought that crypto was officially taxed as if it was a stock.
IIRC, you're taxed when you buy and sell crypto, but if you just let it sit around in your wallet, the price can fluxuate all it wants without you paying anything. You also pay less taxes if you buy high and sell low, but obviously that's not adviseable hahahahaha
Now, pardon me while I play "Devil's Advocate" for a bit, I honestly don't have any particular gripe with paying taxes imho, as long as I have a convienient way to do it. I'm not saying it's a great system or anything, but we gotta pay for roads and such somehow. If anything, I would like to see what taxes are used on what, and know if there was any way to put my 2¢ into the system. I could probably Google it, but I'm not concerned enough right now, LOL.
Also, with putting my 2¢ in... I'm pretty sure that's what voting is for?? But I'm rusty on politics, so don't quote me on it - it's actually probably more convoluted than that sgfjyff
Honestly, if the U.S. Dollar was put on a blockchain or something like it, and all taxes were automatically done at the time of transaction, so there was no "tax season", I'd be pretty happy LMAO XD
They will absolutely tax us on crypto, probably even retroactively. When has the government ever passed up an opportunity to collect tax? The water we drink, the air we breathe, and all we have when we stop breathing the air we've been taxed on.
They can't tax us on things they don't own!
Do they own your home? Property taxes.
Do they own items you purchase from the store? Sales tax
Do they own all your assets that you have paid tax on when you purchased with money earned from your labor (which was taxed)? Inheritance tax
As much as I wish it was true that they can't tax what they don't own, I'm afraid they can, and do.
I think there will be dead zones from the countries that outright "ban" Bitcoin. ie. they say the banks can't interact with the exchanges.
Otherwise it seems most countries are adopting a wait and see approach with crypto's.
I'm sure they will find a way to tax us on our digital assets. Or lock them up in such a way that we cannot access them. Who knows, though.
The fact that I had to sign four pieces of paper just to buy a fraction of a Bitcoin from my USA credit union this year, and pay an overseas wire transfer fee, makes it clear that financial institutions are fearful of government interdiction, and not acting in the best interests of their customers.