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IRS: Bitcoin Is Property, Not Currency
An anonymous reader sends this news from Bloomberg:
"The U.S. government will treat Bitcoin as property for tax purposes, applying rules it uses to govern stocks and barter transactions, the Internal Revenue Service said in its first substantive ruling on the issue. Today's IRS guidance will provide certainty for investors, along with potential income-tax liability. Under the ruling, purchasing a $2 cup of coffee with Bitcoins bought for $1 would trigger $1 in capital gains for the coffee drinker and $2 of income for the coffee shop. ... Under the IRS ruling, Bitcoin investors would be treated like stock investors. Bitcoins held for more than a year and then sold would pay the lower tax rates applicable to capital gains — a maximum of 23.8 percent compared with the 43.4 percent top rate on property sold within a year of purchase. For investors with losses, U.S. tax law allows taxpayers to subtract capital losses from any capital gains. They can also subtract up to $3,000 of capital losses a year from ordinary income.'"
...as you can offset a drop in the value of your bitcoins as a tax deduction.
Good luck getting anyone to declare they own any and therefore owe you money. Chumps.
Not a currency, and instead merely a speculative instrument on par with stocks. Bitcoin is done.
This sounds remarkably fair coming from the tax-man. I've heard horror stories of certain investments that got taxed at a high value but then tanked and had little value for sale. I would have expected something terribly complicated and convoluted in regards to BC, but this actually seems to make sense.
It's self evident. And it doesn't especially "legitimize" Bitcoin. If you don't pay your taxes on profits from selling crack cocaine they can get you for that.
Like anything else someone thinks has 'value', you bought something and then you sold it or exchanged it for goods - that transaction is taxable.
Would it surprise you to know that selling heroine illegally falls under the same set of guidelines? This does not legitimize anything. Bitcoin is no more a currency than junk penny stocks are.
nope.
Common sense, despite all the hoopla, bitcoin really does make a poor "currency". It's really like buying commodities at a certain price, and selling them again at another price
Best example off the top of my head is Oil futures - since both that and BTC have a) a steady increase in value due to limited supplies and b) incredible volatility at times as the market itself is really controlled by big players
Exactly the type of market that Wall Street loves.
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In effect, the IRS is treating Bitcoin like any other "foreign" currency, which amounts to the same thing as treating it as property. When you sell (i.e., spend) Bitcoin, you're realizing a profit or loss, depending on the value it had when you received (bought) it, compared to the value it had when you sold it.
IANAA, but as I read this, it means that if you get paid for work in Bitcoin, you would pay tax on its value at that time, and that value would be considered your cost-basis for future sales of Bitcoin, so you don't get taxed twice on the cost-basis amount.
If it weren't for deadlines, nothing would be late.
Its just a barter system, so that makes sense.
Still dont like the idea of the Feds trying to tax me more, but the concept of property is sound at least.
---- Booth was a patriot ----
Considering what they blow our tax money on, I can't really see the "common good".
Unless owning a bank has become very common lately.
We used to have a Bill of Rights. Now, with the rights gone, all we have left is the bill.
Selling human beings, especially heroines is illegal and generally Frowned Upon. Sort of like selling heroin except worse.
Faster! Faster! Faster would be better!
This is actually good news. Tax on Bitcoin legitimize the currency.
Riiight. I can see all those Bitcoin miners heading out to get their tax forms right now so they can declare their coins.
No sig today...
You are mixing two different issues.
If you've ever touched a road, you wouldn't be asking that stupid question.
Discussing government waste is legitimate, but completely off topic.
What makes you think no tax applies to a barter transaction?
>Just let it go already. You didn't mine Bitcoins at the beginning and now you're pissed off because you're not rich.
I'd think that that would have sounded stupid in your head, so you wouldn't have posted it. What went wrong?
How does the IRS handle foreign currencies? What about stores and restaurants near the border that accept Canadian currency? Is it the exchange value at the time of sale?
(-1: Post disagrees with my already-settled worldview) is not a valid mod option.
I would think this is really bad news in disguise for bitcoin, because it discourages the use of bitcoin for commerce both because of the tax issue and because of the reporting requirements. (Who wants to deal with computing a wash sale just to buy a cup of coffee?) If people are inspired to sit on bitcoin until they cross the 1-year capital gains threshold, that behavior change could move bitcoin one step away from use as a currency, and put it in the same illiquid category as gold or bearer bonds.
Not sure I agree. when the topic is taxes, government waste is definitely on topic....because it calls into question how much they actually need. We are talking about the government that is handing out money left and right to militarise local police all over the country and fund useless project. We are talking about a government that seems to have no problem placing orders for more equipment than the military asks for (C-130s anyone? Congress has only approved 5000% more be purchased than were ever requested...and they even did it just before the "sequestors" hit too).
Honestly, they have too much money. The only discussion we should have about taxes these days are how to decrease them and eliminate useless programs.
"I opened my eyes, and everything went dark again"
Barter transactions are taxable in most countries of the world.
What makes you think no tax applies to a barter transaction?
The fact that no treasury notes change hands, if I were a bettin' man.
An enigma, wrapped in a riddle, shrouded in bacon and cheese
That's becasue the IRS does not actually care where the income comes from.
Only under court order do they report what you do to any other agency.
The Kruger Dunning explains most post on
Considering what they blow our tax money on, I can't really see the "common good".
Not sure if you're just being playfully facetious or if you've actually been drinking the silly-juice. Just in case it's the latter, keep in mind that while there is a lot of inefficiency in government, the vast majority of it is still net positive. I don't like the heavy-handed Middle East adventurism, but it does get us cheap oil by keeping OPEC in check. I don't like our unsustainable social security policy, but it gets rolled back into the economy in relatively efficient spending. I don't like the lackadaisical work ethic of some road crew members or crony corporation asphalt price gouging, but our highway system enables trade and labor mobility that makes all our lives better.
It is a good thing to be critical of wastefulness in government, to treat our policies with a certain degree of distrust, and to work for improvement in government accountability. But to conflate that with the notion that tax evasion might be pro-social is sheer lunacy. Failing to pay our bills would be vastly more destructive than paying bills that are somewhat inefficient. People and corporations that shirk their duty to help shoulder the load are despicable.
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your lawmakers, state and federal, have a different opinion of the subject. Also the IRS.
There are plenty of reasons to not use bitcoin but taxes ain't one of them. You're going to be legally liable for taxes on any income (including any coming from bitcoin) regardless of the IRS ruling but the ruling adds clarity on how it's taxed.
One Bitcoin will always equal 100,000,000 satoshis.
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I'm pretty sure you can declare yourself a ballerina if you want to. Who's going to check? The ballerina police?
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You CAN commit tax fraud. What happens next IS unknown, it could be jail ...
People who mined Bitcoins at the beginning are now millionaires, what's stupid about that?
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I don't disagree, I was merely answering the question as to what OP's rationale may be.
An enigma, wrapped in a riddle, shrouded in bacon and cheese
It was a response to saying MORE federal taxes are a good thing. More federal taxes do not result in more libraries.
Libraries, police, firefighters, most roads ... virtually all of the things pro-tax people put forth as good things paid for by taxes are mostly paid for with the ~ 8% local and state taxes. The feds take four times as much of your money and it doesn't go toward any of those things. Federal taxes do, however, pay for the NSA, billion-dollar bombers, and handouts to campaign contributors.
That seems very common-sensy, but it just raises questions/flames about what you're contrasting it to. Right away, you ought to be thinking, "If I did the same thing with Euros or Pesos, how would that differ?"
Oh.
I don't really know which (if either) of these policies is good (it's all so arbitrary) but I know at least one of them is stupid.
As copyright owner of this comment, I authorize everyone to defeat any technological measure which limits access to it.
Did they just write "Bitcoin" in the new law or something more general that can include anything? Otherwise, Bitcoin is now regulated but LiteCoin, DogeCoin and all the other coins are not.
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Many people at the beginning bought them with cash from companies that are no longer in business. It might be a little hard for the IRS to track.
Peter predicted that you would "deliberately forget" creation 2000 years ago...
The fact that most barter transactions are probably not reported by either party. Not saying that people shouldn't pay taxes on them, just that they probably won't.
Peter predicted that you would "deliberately forget" creation 2000 years ago...
I'm assuming that Slashdot administrators changed how the software handles non-breaking spaces after seeing how certain users have used them to post obscene ASCII art such as ASCII Goatse.
defaulting on the gold dollar has marked the beginning of the end of USA economy
You saying there has been no economic growth in the US sense the depression? No jobs created in that period. No increase in property and assets?
Not so fast. The IRS does tax barter transactions.
http://www.irs.gov/taxtopics/t...
Selling heros, however, is an everyday occurrence, especially in delis.
"If a nation expects to be ignorant and free in a state of civilization, it expects what never was and never will be."
Heroines also frown on cutting; it is generally left to other folks. Cutting culture rarely affects heroines anyway.
Ok, so if I decide to live without any currency whatsoever, and I live entirely on bartering, and I trade my cow for 20 chickens, am I supposed to send a chicken or two to the government? Is the person who receives the cow supposed to cut off it's tail and send that? What? How would it work? I think it is kind of silly because the whole point of bartering is to avoid using currency, so attempting to tax people for barters based on their currency value and expecting taxes to be paid with currency is silly, and nonviable, because one can't assume people who are bartering have any currency at all.
Yep, you don't have to pay capital gains on the appreciation of your property. Not the same thing as property tax. Property tax is dealing with the property's "current value". Since you are still holding the property, no capital gains (or losses) have occurred (yet).
What would your cost basis be for miners? Could you count the cost of electricity and equipment or would it be considered zero?
Yeah, nobody got rich off Bitcoin by not dismissing it out of hand when it first hit /., actually looking into it and writing a GPU miner.
...
Oh, wait.
they may find out from the other half of the participants in transactions; then you are in the proverbial deep doo-doo
One also can't assume that people who inherit real estate or stocks, or who find a pirate's chest of gold doubloons, have any currency. Tough for them; they've got until April to liquidate some of that junk into something they can write a check to the IRS on. And for the treasure hunters, that's the April following their find, whether they've sold any of it or not.
Oh, and that goes for both of you bartering hippies: you need to report as income the fair market value of those 20 chickens, and the other guy likewise reports the full value of that cow. Even had you sold the chickens for cash and paid for the cow with that, you might well have both finagled a capital loss.
Dunno about sales taxes.
Gold is taxed exactly the same way.
How does one determine which specific Bitcoin (or fraction) was spent from one's owned pool to determine whether any appreciation is long-term or short-term? Is it a record-keeping thing only, much like tossing pennies in a jar every day and recording it in a ledger, then taking random pennies back out to pay and noting that they're the oldest, whether or not they are (or can be proven to be)? I foresee IRS challenges around long-term vs. short-term in audits, especially for folks with lots of transactions.
So if you take payments in bitcoin, they will be taxed as property, and not as currency?
Interesting, and messy.
I'm sure that if you were a resident of the middle east, where this American "adventurism" is taking place, you might call it something different. I'm sure you sleep well at night knowing that you have cheap gasoline for your auto. Who cares what harm this "adventurism" causes to the region or whether it is morally wrong. Dag gummit, I wanna drive my SUV! You should be less critical of people who actually want to *do something* about overreaching federal control rather than just being "critical" or "distrustful" and doing nothing. Anyone who tries to defend the US government (especially after the NSA revelations) is a fool or has the "frog-n-water" complex.
https://secure.downsizedc.org/etp/honest-money/
Free Competition in Currency Act
Rep. Ron Paul introduced a bill in the last two Congresses that would bring the above benefits. This bill, called the "Free Competition in Currency Act," was reintroduced in this Congress by Rep. Paul Broun (Bill Number H.R. 77). It has three parts . . .
The Honest Money portion would repeal the legal tender law, which gives the Federal Reserve a monopoly over the money supply.
The Competitive Currency section would repeal the words of Title 18 Section 489 of the U.S. Code, which gives the United States government a monopoly over the creation of coins for use as currency.
The Tax-Free Gold component of the bill would prohibit federal and state taxes, such as capital gains, on precious metal coins and bullion.
You can read the full text of the bill on our Background page.
If you're well versed in economics you may already know how these simple changes could . . .
Help end both inflation and recessions.
Help to End the Fed, by creating a free-market alternative to the Federal Reserve money monopoly.
If so, you can ask your elected representatives to co-sponsor these bills using our Educate the Powerful System on the right side of this page.
If you don't know the significance of repealing the legal tender law, the coinage monopoly, and taxes on gold, or you're looking for good talking points to use in your message to Congress, please read the article that follows, titled "End the Inflation Tax" . . .
The Legal Tender Law Creates a Monopoly
Every paper dollar you own carries the words "Federal Reserve Note" (FRN). This means they were authorized for issue by the Federal Reserve System (the Fed), a national bank created by Congress. The legal tender law gives the Fed a monopoly over what you use for money.
When a currency is legal tender you are legally compelled to accept it in payment for debts, even if you've made a contract to be paid in some other currency or commodity, such as gold. The Free Competition in Currency Act would free you to use other currencies, gold, silver, or all of them at the same time, including FRNs and would make gold contracts legally enforceable in court.
If this seems like a strange new world to you, please realize that you already live in this world to a certain extent.
When you check-out at a store you can already pay using cash, check, debit card, or credit card. You probably also have different accounts you use for various purposes. Repealing the legal tender monopoly would simply extend this process, giving you more choices.
How the FRN Monopoly Works
Choice is good because it allows competition. Monopoly is bad because it leads to price-fixing. Monopoly control over what you can use as money provides the greatest price-fixing power of all. It impacts ALL of your economic transactions. The Fed can manipulate the price of everything by increasing the number of circulating dollars (inflation), or by decreasing that number (deflation).
How the Fed is like a counterfeiting ring
Counterfeiters also inflate the money supply. They use their fake money to get something for nothing, taking wealth from others without creating wealth of their own. It's stealing. But the long-term consequences of counterfeiting are even worse than the initial theft.
If the counterfeit dollars stay in circulation they will trick businesses into making a disastrous mistake.
Assume you're a widget maker. The extra circulating counterfeit dollars will cause demand for your widgets to rise. This increase in demand is actually an inflationary bubble, and that means trouble . . .
Your widgets will start to fly off the shelves faster than you can make them. This will cause you to increase prices to maintain inventories, and to invest in new production and staff to meet the hei
I'm sure you sleep well at night knowing that you have cheap gasoline for your auto. Who cares what harm this "adventurism" causes to the region or whether it is morally wrong.
Perhaps you missed the part where I said, "I don't like the heavy-handed..." (or perhaps you took my lack of expletives to mean I don't mean "heavy handed" in a strong enough sense, but I can't be responsible for your misinterpretation)
You should be less critical of people who actually want to *do something* about overreaching federal control rather than just being "critical" or "distrustful" and doing nothing.
Perhaps you missed the part where I said, "...and to work for improvement..."
If you find yourself reacting so emotionally that you fail to read the post to which you are responding, it may be time to step back, take a deep breath, and get a grip. Or seek help.
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So you'd consider a debate about things like socialism and other government money topics relevant to this conversation?
I doubt it. This is just about the legal classification of bitcoins, not about how tax money is spent *at all*.
No, you're supposed to pay your taxes in the form the government with the military SAYS you're supposed to pay your taxes regardless of what you personally use for a medium of exchange.
See: Split Tally Sticks, especially their use in England, for an example. It is still the longest in-use form of currency in history. Started by King Henry I around 1100, they persisted until 1826.
Learning HOW to think is more important than learning WHAT to think.
And as has been pointed out elsewhere - you can do the barter thing - but you'd still better come up with something your government considers money to pay taxes on all that bartering, 'cuz the government isn't interested in a couple gallons of goat milk or a few dozen eggs, or borrowing your car on the weekends. Savvy?
Goddamn cheapskates can be obsessive. And not smart-obsessive.
If you do some actual math you'll note that any individual program is a rounding error in terms of a $Trillion budget. You'll also note clever assholes can provide plenty of rationales why even obvious spending programs suck. Remember the "volcano research" gaffe?
As for the programs you mentioned, for God's sake do some actual research. You're wrong about the C-130. It's one of the reasons that we can do the things we do, and in the context of the Air Force budget it's barely a rounding error. The "militarization" of police forces is even cheaper.
If you actually want to reduce the size of the federal government, and it's attendant tax burdens, you have to do at least two of three things.
1) Gut Social Security.
2) Gut Medicare.
3) Decide the post-Hitler decision to have a military capable of responding to m ultiple criuses at once world-wide was a dumb idea and fire half the Pentagon. Note that this doesn't involve eliminating any actual programs (our boys will still need or transport even if there are only 50k of them instead of 500k).
None of these three things ever happen because actual Americans, including you, are incapable of telling somebody who puts in 40 hours a week that the government spending he was planning on benefiting from (ie: Social Security, Medicare, or a job in the military) has to go away.
Nothing has changed much. Don't mess with the US Government - it's about like a mouse messin' with a gorilla.
Until you have done that, please stop posting here on /. IQ's used to be a lot higher when UID's were lower. *Sigh*
The really attention-grabbing thing about the IRS guidance is Question 8 under the FAQ, which reads:
Q-8: Does a taxpayer who “mines” virtual currency (for example, uses computer
resources to validate Bitcoin transactions and maintain the public Bitcoin
transaction ledger) realize gross income upon receipt of the virtual currency
resulting from those activities?
A-8: Yes, when a taxpayer successfully “mines” virtual currency, the fair market value
of the virtual currency as of the date of receipt is includible in gross income. See
Publication 525, Taxable and Nontaxable Income, for more information on taxable
income.
(emphasis in the original)
This sounds like an enormous amount of record keeping for individual miners to keep track of.
The government can't force me to use currency if I don't want to.
How many chickens would you like to bet on that?
Ok, so if I decide to live without any currency whatsoever, and I live entirely on bartering, and I trade my cow for 20 chickens, am I supposed to send a chicken or two to the government?
No. You are supposed to send the market value of that chicken in the form of the accepted fiat currency. Which means dealing with the established financial systems, banking, etc.
That's how they keep you in the company town. And if you try to escape the plantation to a free state, we have treaties that oblige them to send you back. There is no sanctuary.
Have gnu, will travel.
It doesn't matter. Bartering with anything of value imposes a requirement upon all involved parties to report the transaction and compute the value in the fiat currency.
The only ways I see this working is if you barter or trade totally within a virtual world, where no other currency is accepted for trades. So it would be impossible to assign a value to any of the items or virtual currencies traded. Or you could figure out how discount coupons work, where they say "Cash value 1/20th of one cent".
Have gnu, will travel.
First off if you're in a state that actually spends only 8% of it's SDP you're in a minority. Most states are in 9% or 10% range. More people live in one state that's above 11% (Cali) then all sub-9% states combined.
The Feds support a lot of state-level spending through indirect programs. Student aid like Pell Grants, Race to the Top money, and support for police allows a lot of libraries to be built.
The NSA, billion-dollar-bombers, and campaign contributors only actually add up to a small fraction of the Federal budget. A huge chunk is transfer payments set up before most campaign contributors were born. Medicare and Social Security alone are a majority of Federal spending in the 2010-2019 period. Medicaid is another fairly large chunk, this year ObamaCare subsidies kick in, with Pell grants, Earned Income Credit, military retirements, the VA, etc. I'd estimate 2/3-3/4 of Federal spending is simply the Feds shuffling money from the accounts of some Americans into the accounts of American who American voters have decided deserve the money more.
The "Billion-dollar-bombers" could be gotten rid of easily in theory. In practice those pesky American voters tend to look on defense cuts as encouraging Putin to be Hitler Mk. II, so it's unlikely they'll be cut. Whatever it's other crimes, the NSA budget is a rounding error (literally: $11 Billion is under 1/3 of a percent of the total) on the Federal total. "Handouts" to campaign contributors tend to be exaggerated. There's generally no quid-pro-quo. What happens is the company that would be a shoe-in if the government decided to study the effect of dung beetle blood on the flu virus finds a candidate who supports studying dung beetle blood and sends him a check. If Congressional votes could actually be easily bought then we wouldn't have a DRIC project, we'd have a second span to the Ambassador Bridge.
Which means that when Federal spending cuts get talked about proposals tend to be both ambitious and vague (ie: every Paul Ryan "budget" ever) or specific and miniscule (like your proposal, which the NSA's 0.31% off Federal spending). The specific/miniscule cuts that could actually get passed would almost certainly include most support for states and cities because Congress doesn't get yelled at when Jindal has to expel scholarship students from Louisiana State.
Well then, they haul you into court. They state their opinion, you state yours and the judge decides who is right.
Tax court. They aren't going to risk this in a judicial court.
Have gnu, will travel.
"I don't believe in imaginary property" was a popular anti-IP catchphrase here on Slashdot. It seems like it could apply here too.
.... and than you give examples to illustrate the above:
Are you really insinuating that the wholesale murder of hundreds of thousands of innocent civilians is eclipsed by the benefit of cheap oil?
While I agree with you that certain Americans benefit off the corrupt policies of foreign interventionism and leveraging our power with exploited contracts and trade barriers, spying on foreign businesses to give US ones unfair advantages with the NSA, some of us recognize this isn't ethical. Rationalizing such behavior sounds cruel and insinuating that an emotional response isn't also backed up with good reasons and provable facts is unfair.
I don't care if its a government, corporation, religion, or individual committing these crimes against humanity, it doesn't ever justify cheap oil or a smooth highway. There is a line that is repeatedly being crossed where a person of good conscious should become intolerant to any entity despite some beneficial side effects. The ends do not justify the means and it is presumptuous to believe that their is even a net benefit for yourself.
/Oblg.
No Such Thing as Bad Publicity
http://tvtropes.org/pmwiki/pmw...
aka "Any News is Free Advertising / Marketing"
Many people at the beginning bought them with cash from companies that are no longer in business. It might be a little hard for the IRS to track.
"Not in business" could make it easier. A bankrupt entity isn't able to hire a lawyer to stop the IRS from going through it's paperwork.
Moreover the IRS doesn't actually need records. What it needs is proof you got money and you didn't put it on your tax forms. If they get your bank records they'll know exactly how much money you made when you sold Bitcoins from when you deposited it. They will tax your ass on that full amount. Plus penalties, and interest. Any attempts to talk them down will result in extremely polite,. professional, "fuck yous," and attempts to dodge by ignoring the bill will be met with increased penalties and wage garnishments.
If you'd declared the Bitcoins and deducted your costs (in tax terms "reported the basis") then you'd have saved money, on the original tax bill, paid no penalties and interest, and never been told "fuck you" by the IRS.
So basically if the IRS really wants to screw early Bitcoiners they will be screwed. It'll be more work then screwing people who dodge their tax bills with questionable home office deductions, but that just means the IRS will really enjoy screwing BTCers.
Are you really insinuating that the wholesale murder of hundreds of thousands of innocent civilians is eclipsed by the benefit of cheap oil?
No, I said the exact opposite. I said that in my opinion the cost is greater than the benefit. Your reading comprehension is terrible.
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Are you really insinuating that the wholesale murder of hundreds of thousands of innocent civilians is eclipsed by the benefit of cheap oil?
No, I said the exact opposite. I said that in my opinion the cost is greater than the benefit. Your reading comprehension is terrible.
I understood the context just fine. You just are under the impression that it is morally justified to continue to support said behaviors with federal tax dollars because not doing so would have a much greater detrimental outcome for society. Some would suggest that their is a very good moral argument to be made by practicing agorism when more than half of federal tax dollars support activities many do not agree with.
Sad story but that's exactly what I did. I saw Bitcoin mentioned on Slashdot, read a bit about and went "meh".
Knowing myself I would have gathered about one million of them, thinking they'd be worth one dollar at the most some day.
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While they can't "force" you to use currency. They can seize your assets (chickens, cows) and liquidate them (for currency) to pay your taxes. There is a reason for Ben Franklin's famous quote, "in this world nothing can be said to be certain, except death and taxes"
Some would suggest that their is a very good moral argument to be made by practicing agorism when more than half of federal tax dollars support activities many do not agree with.
I do not disagree with that statement, but I strenuously disagree that more than a very small percentage of people who have studied public finance would say that more than half of an average federal dollar is wasted. If military adventurism(*) is your major objection, then bear in mind that total military spending, budgeted plus war, is about 25% of each federal dollar. Of that money, less than half is war spending. So even if you say every single penny of that war spending is bad, that still leaves about 89% of every federal dollar that has not been determined to be bad. Suppose you cut our budgeted military spending to the smallest %age of GDP of any industrialized nation; that would still leave about 82% of every federal dollar that has not been determined to be bad.
Medicare, Medicaid, Affordable Care Act and Social Security combined make up about 60% of the budget. And even an extremely dim view of that spending would put more than 80% of it going right back into the economy. I'm not saying that's good, because it's not. Wasting 20% (if you were such a pessimist as to accept that figure) of every dollar would be horrible. So that scenario cuts that 60% down to 48%, or a loss of 12% from the federal dollar.
Let's re-integrate those figures and see what's left. We lost 11% of every federal dollar because we hypothesized that the Middle East operations were a total loss -- not just wrong on balance, but a total loss. We lost another 12% from inefficiency in Social Security, ACA, and Medi*. We tossed out another 7% assuming that our budgeted military should be cut from the largest in the world to the smallest per GDP of any industrialized nation. That's 30% wasted out of every federal dollar, worst case scenario, so far.
But there's a problem. We reached that 30% waste figure by paring down 85% of federal spending. SS is 25%, health care is 35%, budgeted plus war military is 25%. That only leaves 15%. So now let's assume that every highway, the post office, everything the FBI does, the DEA, the CIA, border patrol, air traffic control, NASA, and everything else that the federal government does is a total loss -- nothing redeeming whatsoever. That brings the total waste up to 45%.
And I think you'd be hard pressed to find an economist who would accept *any* of the above figures as being a reasonable estimate of waste. Realistically, it's hard to waste 50% of a dollar without diong something completely irredeemable like building palaces. And even that, the contractors would be rolling a lot of that cash back into the economy. It's easy to waste 5%, or even 10%. 50%, though, is virtually impossible without a concerted effort.
So, if you think things are bad enough that the government should be overthrown, go for it. Begin advocating for the overthrow of the government. Or if you really think the US is irredeemable, leave. There are plenty of places on this planet that are better by many measures. But staying here, and quietly trying to get out of paying your taxes, telling yourself that you are taking a principled stand because 51% of your tax dollar is wasted, is bullshit.
* Side note: Adventurism is a pejorative referring to politics or activism that involves reckless or irresponsible behavior or conduct pursued only in the interest of excitement. Adventurism is often used as a criticism against some government's policies. Countries pursuing foreign wars of dubious merit or which have little chance of success have often been accused of adventurism by opponents.
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While I agree with you that certain Americans benefit off the corrupt policies of foreign interventionism and leveraging our power with exploited contracts and trade barriers, spying on foreign businesses to give US ones unfair advantages with the NSA, some of us recognize this isn't ethical. Rationalizing such behavior sounds cruel and insinuating that an emotional response isn't also backed up with good reasons and provable facts is unfair.
What are the facts to support these claims?
What were the charges that the Feds used against gangsters back in the day? The tax implication will provide a mechanism to go against those using Bitcoin illegally. I do not believe miners are criminals. However this news does put them in a sticky situation.
One mans inefficiency is another's contingency planning. All that road capacity looks like a waste at anything other than peak times.
IRS knows about your stock trades because your broker sends them a Form 1099 with all that information. I doubt any Bitcoin exchange will be sending the IRS information about your Bitcoin trades.
.....but I strenuously disagree that more than a very small percentage of people who have studied public finance would say that more than half of an average federal dollar is wasted.
Nowhere did I refer to my disagreement being with wasteful spending. The fact that I was talking about ethics and mentioned agorism should have made my point abundantly clear. Suppose there was no waste, would that make such duplicitous, unethical, hypocritical behavior any better? I understand many human societies and individuals aren't perfect. I don't expect a utopia, but many Americans have been drinking the kool aid for so long that they either don't see the overt hypocrisy , they are apathetic, or they rationalize their support which you seem to be doing.
If you feel so strongly that 11-20% of what you pay supports human rights violations or policies that are bad for humanity why do you do it? There are ways you can directly and indirectly support aspects of the government you agree with.
Or if you really think the US is irredeemable, leave. There are plenty of places on this planet that are better by many measures. But staying here, and quietly trying to get out of paying your taxes, telling yourself that you are taking a principled stand because 51% of your tax dollar is wasted, is bullshit.
Why are you assuming I am an American citizen or haven't already left? To those living in the US I would suggest leaving but I can certainly understand those that decide to distance themselves as conscientious objectors within the US.
A link to tvtropes? Well there goes the afternoon for anyone who follows it :)
They also were forward-thinking in their deliberations. Originally they wanted "Life, Liberty and Property" but there was debate on how that could be used to CONTINUE slavery, so they settled on "Life, Liberty and pursuit of happiness". That was one of many compromises that were made.
All these discussions would be MOOT if people educated themselves about the FAIR TAX and then pushed their governments, friends, family, total strangers to help support it and get it passed into law.
What are the facts to support these claims?
For brevity I will narrow the examples down to what many American's are unaware of, a few examples off the top of my head where intelligence agencies work on behave of private interests within the US:
https://en.wikipedia.org/wiki/1954_Guatemalan_coup_d%27%C3%A9tat
https://en.wikipedia.org/wiki/John_Stockwell
writings go into detail with corporate involvement and the military industrial complex.
"The CIA and the big corporations were, in my experience, in step with each other. Later I realized that they may argue about details of strategy - a small war here or there. However, both are vigorously committed to supporting the system."
Recent Snowden leaks shows this is still prevalent:
http://www.reuters.com/article...
http://www.theguardian.com/wor...
Keep in mind that all the judges in tax court got there by working for the IRS first. A blatant violation of the separation of powers.
-- Will program for bandwidth
I'm not an accountant, this is not tax advice.
It seems that miners need a daily log of the coins mined and the closing prices on an acceptable exchange. Each day's coins may have their own basis, the number mined multiplied by the closing price on the exchange. This basic seems to be counted as income.
Equipment and electricity are probably not factored into the basis. They are most likely a separate deduction.
It is not a law, it is just a guidance, that is, their current interpretation of the law. It can change easily.
And until changes are made they will fine you and apply penalties if you deviate from their guidance. Their interpretation is not optional, it carries weight until a court or congress says otherwise.
Each and every ledger entry has a cost basis. For incoming coins the new coins have a value based on the time they were received. The old coins returning to you based on when they were new. For outgoing coins (not including those coming back) it would probably be like other accounting practices where a first in first out (FIFO) system or a last in first out (LIFO) system is used. In either case the basis of the outgoing coins are known.
The odd thing would seem to be that as the outgoing coins are spent its necessary to determine if a gain (coins being paid at a price higher than basis) or a loss (coins being paid at a price lower than basis) is being recognized.
Ex. You buy one coin at $500 and another at $600. Coins are priced at $800 at the time of a future purchase. You buy something for $1,200, 1.5 coins. Using FIFO your basis for the outgoing 1.5 coins is $500 + $300 = $800, and the basis for the returning 0.5 coins is still $300. You experienced a gain of $400 on the 1.5 coins at the time of the sale and that $400 would seem to be taxable income. Apologies if I botched the math, its late, hopefully the point gets across.
Is all this a royal pain in the ass, yes. But basis, gains and losses seem perfectly calculable.
Any sort of in game currency where there isn't any value isn't going to be an issue since, well, there's no value. Now I know WoW gold is sold by Chinese farmers, but over all it is a zero value item. Blizzard doesn't allow sales, they'll ban you if you buy or sell, etc, etc. It isn't the kind of thing anyone buys as an investment or speculation or anything. It also isn't worth very much, and you find most IRS rules exempt things under a certain amount.
Particularly if YOU don't buy or sell it then there isn't really any issue. They aren't going to come after you for something you never exchange for currency, if for no other reason than they aren't going to monitor it at all.
In general game currency is likely to be left alone just because the amounts aren't likely to get that high. Plus most games have a highly inflationary economy. There is no limit to money, there's no "Horde Reserve Bank" that issues gold. The game just generates it whenever you do something that is programmed to give gold, and you can do it as much as you like. So buying gold to hold on to would basically always be a money losing proposition.
And they thought it would be the real world.
It seems most BTC proponents are either people who are scammers, traders trying to make a quick buck, or true believers with an extremely poor understanding of economics. Most of the true believer types think that BTC would be great because there would be no taxes to pay on them and taxes are evil!
They never bothered to think about the fact that the government isn't likely to just give up on trying to collect taxes, nor what would happen to society if taxes were not able to be collected. It is just a selfish "I could have more money without doing anything, and so I like it!" attitude.
A capital gains tax on bitcoin legitimizes it as property or commodity. It's a pretty terrible ruling for bitcoin as a currency.
"Lack of speed can be overcome. In the worst case by patience." --Znork
Not just taxes, but a whole slew of other things... an "extremely poor understanding of economics" greatly underestimates the case. And that's without considering the "gubments are ev1l" tinfoil hat nutters.
I doubt that is what happened. Nonetheless, if it did and cryptocurrencies continue to succeed, they will change it.
Look on the bright side -- at least you are only getting half the government you pay for.
I have sad news, when you are accused in tax court you are very likely going to be found guilty, without anything resembling real "due process". best not to go there...
If somebody else pays more taxes, it's possible for you to pay less. Taxes have gone both up and down in my lifetime.
Similarly, if somebody does something underhanded to pay less taxes, you're on the hook slightly more.
However, Bitcoins will not bring in more tax money, unless the alternative is allowing Bitcoin to be used to evade taxes. All those taxes would be due no matter what.
"When you have eliminated the unacceptable, whatever is left, however improbable, must be the truthiness" - Holmes
Are you saying the rules would be any different if people were investing in euros? You can use Bitcoins as currency all you like, as long as the IRS gets what's legally coming to it.
"When you have eliminated the unacceptable, whatever is left, however improbable, must be the truthiness" - Holmes
Not their problem. Suppose you sell a bitcoin for $500. That looks like $500 in capital gains income to the IRS, and if you want to pay taxes on less than $500 it's your job to provide the cost basis (and, depending on how they're feeling at the moment, provide credible sources for that cost basis).
There are reasons why people tell you to keep records of things for tax purposes.
"When you have eliminated the unacceptable, whatever is left, however improbable, must be the truthiness" - Holmes
Has the fair market value of a gaming console gone up? Usually they go down, and the IRS doesn't care about transactions that don't get you a profit. Garage sales are similar; the IRS figures that you probably paid more for each individual item than you sell it for, and if they're wrong on a few items it doesn't matter much.
"When you have eliminated the unacceptable, whatever is left, however improbable, must be the truthiness" - Holmes
Governments can't control what people use for money. They can control what they use for money, and what you must use when dealing with them. You are required to keep accounts of your income etc. in dollars (most people have those accounts maintained by somebody else and mailed to them before tax time). Once you have calculated your taxes, you need to pay dollars to the government. If you get goods or services from the government that must be paid for (stamps, park entry fees, etc.), they must be paid in dollars. If you lose a lawsuit, and are ordered to pay money, it will be given as dollars and you will be required to pay dollars if you can't make other arrangements.
Other than that, yup, you can use whatever you want for money, as long as a few other people will agree to use it.
"When you have eliminated the unacceptable, whatever is left, however improbable, must be the truthiness" - Holmes
nope, they are in the block chain, even if you are mining them. All it is needed is for some sites like Coinbase or Coindesk to publish their historical prices for BTC. The rest is just a software problem.
Thanks for the information and you make a good point on the first but not the second. I read the news Wiki articles and it appears there is evidence to support your point about the 1954 Coup and John Stockwell.
The posts about Snowden are allegations that the government gave information to US companies but there is no evidence cited to support this allegation. His supposition is built on the premise that the US government had access to the information thus they must be giving it to US companies.
It appears that China and France are actively engaged in Industrial espionage. http://en.wikipedia.org/wiki/I...
This is a tough crowd. You gotta do anything you can for a laugh.
Faster! Faster! Faster would be better!
Indeed ... found this gem of "Seinfeld HD"
* http://comediansincarsgettingc...
* http://comediansincarsgettingc...