There's only two possibilities here. Either the IRS is intent on destroying bitcoin or they are so completely incompetence and they presume their capacity to introduce policy in the face of their own complete and utter ignorance of the facts. Nor would it seem that even a modicum of research is necessary for the big pant-loads at the IRS to screw up other people's lives. Well done you clowns!
So, since they've decided that bitcoin is property, not a legitimate currency, every time one uses it as a consumer, every cup of coffee, restaurant meal, book, piece of computer hardware, you buy with it, you have to pay capital gains tax. In other words, bitcoin has been elevated to the prestigious position of gold: scary competitor to whom we will give no quarter.
That's about the shape of things. If you have illusions about why nation states suppress and make a mockery of free markets through their coercive enforcement of their fiat currencies, surely these facts should disabuse you. In that context, really, nothing less should have been expected from the IRS.
What does this mean for bitcoin? Things start getting interesting. Many have been talking about lobbying for a change of policy. That seems strangely myopic in its blindness over the necessity of national governments to not allow competitors with their currency.
IF you've been paying any attention, you should already know the skinny on this. The only way for bitcoin to succeed is as a competitor to fiat currency. Furthermore, the only way to be such a competitor is going to be outside the blessings of nation states.
Does that mean, some will ask, that it is condemned to fulfil the silly accusations of the mass media that it is the currency of criminals? Depends what you mean by criminals.
If by "criminals" you mean people freely engaging in voluntary exchange which does not trespass on the life or liberty of anyone else, but which the wise overlords of the state determine is unacceptable? Well, maybe.
Do remember though, that the real criminals, the ones who use violence and extortion to get their way - the narcotics cartels, the human traffickers, the professional murderers - have long used the U.S. dollar as their coin of the realm. Whose money is the real bank roll of gangsters?
Call me cynical, but as far as I'm concerned, this is about criminalizing people who just want to choose their own currency of exchange. But we can't have that, can we? That would be just too scary for the fraudsters and bureaucrats who run our government-banking complex.
So, since they've decided that bitcoin is property, not a legitimate currency, every time one uses it as a consumer, every cup of coffee, restaurant meal, book, piece of computer hardware, you buy with it, you have to pay capital gains tax. In other words, bitcoin has been elevated to the prestigious position of gold: scary competitor to whom we will give no quarter.
That's about the shape of things. If you have illusions about why nation states suppress and make a mockery of free markets through their coercive enforcement of their fiat currencies, surely these facts should disabuse you. In that context, really, nothing less should have been expected from the IRS.
What does this mean for bitcoin? Things start getting interesting. Many have been talking about lobbying for a change of policy. That seems strangely myopic in its blindness over the necessity of national governments to not allow competitors with their currency.
IF you've been paying any attention, you should already know the skinny on this. The only way for bitcoin to succeed is as a competitor to fiat currency. Furthermore, the only way to be such a competitor is going to be outside the blessings of nation states.
Does that mean, some will ask, that it is condemned to fulfil the silly accusations of the mass media that it is the currency of criminals? Depends what you mean by criminals.
If by "criminals" you mean people freely engaging in voluntary exchange which does not trespass on the life or liberty of anyone else, but which the wise overlords of the state determine is unacceptable? Well, maybe.
Do remember though, that the real criminals, the ones who use violence and extortion to get their way - the narcotics cartels, the human traffickers, the professional murderers - have long used the U.S. dollar as their coin of the realm. Whose money is the real bank roll of gangsters?
Call me cynical, but as far as I'm concerned, this is about criminalizing people who just want to choose their own currency of exchange. But we can't have that, can we? That would be just too scary for the fraudsters and bureaucrats who run our government-banking complex.
About the Author:
Wallace Eddington is a leading commentator on financial and monetary events and a regular contributor to the Bitcoin Profit Calculator site, where he's gotten the scoop on the Mt. Gox fiasco and other hot bitcoin topics. See also his hard hitting piece on inflation at the Fiat Currency Review.
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