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RE: Blockchain can create a tax less economy

in Project HOPE5 months ago

Dear @bala41288

I was thinking about a similar concept for the government tax collection as well. If the government finds a way to get some alternative source of income, it should even be possible to create a tax less economy.

I'm afraid I need to disagree.

First of all, most countries will not accept crypto as a way to pay taxes. Simply because it would mean, that crypto is considered "currency". And that would give crypto enormous rights, which neither central banks or commercial banks would like.

I don't think it will change - not as long as central banks have so much control over financial systems. Crypto is mostly used as a store value and I only see it moving forward as such.

On top of that - you may not fully understand idea behind taxes. In theory no country require collecting taxes. Money (in theory) could be simply printed and pumped into economy, without any limitations.
In the past taxes didn't exist in current form. But then many countries failed because whenever currency has been losing its value - people would trade this currency to any other one. Creating even more selling pressure and crashing such a currency.

To avoid it - goverments needed to create some internal demand for their own currency. To avoid situation, where all people are selling currency whenever they get paid. That was the case in the past and number of economies crashed and burned because of that. Venezuela is currently also great example of it. Whoever gets their salary in Boliviar - is selling those boliviars and moving resources into anything they consider "safe".

Taxes are creating such a demand. On top of that morgages and loans are creating such an internal demand as well.

Let's say I would earn in Indian rupee and I would expect value of this currency to drop. I will trade my earnings to USD/EURO/gold/crypto - but I will keep some rupees to cover my dialy expenses and also I will hold enough to cover my morgage and pay taxes. If not for taxes - I would end up dumping even more rupees.

Am I makins sense? I hope I do.

Yours, Piotr

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Hi Peter,

I don't disagree with your analysis. It may not be perfect but no expert has a complete handle on these matters.

What I will say is that currency began creeping into pure trading markets long ago. It's simply easier for the baker to make bread all day long and the rancher to heard cattle over the same time. When both go to market, they have what they need for a Phili Cheesesteak (the sandwich of choice in the city where the Declaration of Independence was signed and the Liberty Bell rests- also where much of National Treasure was filmed <sub>- just some amusement/been up a while).

Now, if Bitcoin can prove to be the most secure place to store data like intellectual property rights and proof of ownership...

  • And a fast cryptocurrency can revolutionize instant international payments while leveraging Bitcoin and leaving bank issued credit cards in the dust...
  • And smart contracts can facilitate the legal, ownership transfer, and regulatory measures needed for things like real estate, ...
  • Just one more thing would be needed for crypto to be useful as taxes...
  • Governments would need to tokenize themselves.

Government can feel secure by going blockchain because they are [supposed to be] representative of their citizens. And what government would not rather want silver itself over a Silver Certificate. Alas, people in power feel comfortable when keeping people down rather than lifting them up. Even those power brokers who are philosophically Christian are slow to deny themselves.

Certainly, blockchain going beyond a store of value depends on crypto being useful, like needing Ether to run smart contracts on Ethereum, or needing CHI for XAYA (Namecoin) operations, or buying EOS for CPU on EOSIO.

Cheers.. and hoping that the crypto industry becomes more than what the world sees of Bitcoin as a store of value. As for now, ETH, the best option to BTC, is way too inefficient.

Godspeed. Hope to connect more often.

Marco

Thanks marco