Bitcoin is good for your government’s treasury
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Bitcoin is good for your government’s treasury
By FF2K
Posted January 26, 2020
As long as your government controls the exchanges and retail businesses, you will always need to convert your bitcoin to fiat if you intend to use it. Since bitcoin is limited in supply and fiat is not, the value of bitcoin in fiat should hypothetically continue to rise as long as your government needs to print money to fund their excess spending and more people have a need for bitcoin. This fact and the existing tax laws incentivize the bitcoin owner to HODL. The longer one HODLs the greater appreciation in fiat they will see.
Bitcoin is a universal measuring stick that should expose fiat production/inflation. Why would your government allow such a scarce asset be used and traded? The answer is simple, capital gains tax. Capital gains tax, can range from 0, 15 or 20% in the USA. Let’s use 15% for our example. If a bitcoiner buys (1) bitcoin for $8,000.00 and over the course of 3–4 years, it rises in price to say $30,000.00, if he spends it or exchanges it, he needs to pay 15% of the difference ($3,300.00) back to the government. At a bitcoin price of $61,333.00, the bitcoiner owes the government the original $8,000.00 back in taxes. At $100,000.00 bitcoin, the bitcoiner owes the government $13,800.00 which is more than the original $8,000.00 he invested.
In the future, I see this capital gains tax similar to valued added tax or a sales tax, you will incur it when spending. Is this a bad thing? In my opinion, it’s better than the existing system for all participants.
The HODLer could have left his $8,000.00 in fiat and experienced the loss in purchasing value, or he can enjoy 85% of the gain from the debasement of his currency.
The Medium of exchange user, who doesn’t HODL does not have a capital gain, so he is not affected.
The No-Coiner can continue to live his life in disbelief of this phenomenon as he always has.
Your government gets to collect tax on their money printing.
This is simply my opinion and it is why I don’t fear the government shutting down bitcoin, why would they?
I’d love to hear your feedback