[ExI] tyranny by 16th amendment

[Mirco Romanato]

Il 24/05/2013 06:13, Dan ha scritto:

> My guess would be that they'd look at the dollar side of the
> transaction. The initial input of dollars (or other government
> currencies) would be traceable, no?

Not always. Not easily.
People could accept Bitcoin in exchange of goods and services.

> Also, any withdrawals into
> government currencies would also be traceable, no?

Not always, not easily.
If I work with cash, or other currencies-like stuff, you can not detect
me directly.

> Or, on that side, they might simply audit you.

They could audit you and see if your life style in compatible with your
declared income.

But, with Bitcoin, they have a big problem.

First, you could have just a life style little over your income, not
enough to trigger their sensors.
Second, you have a lot of people doing transactions all the time, off
the records, with different addresses. How they audit all of them?

They can threat an audit to so many people before:
1) It become an empty threat
2) They start bleeding resources to really audit people
3) They lose revenues jailing people
4) People start reacting badly when they ask for an audit.

There is, already, a list of taxpayers deemed too dangerous to approach
alone by the IRS officials.
If the IRS start to escalate, the list will increase a lot.
Then an actual audit will become very costly.

Think about Joe Stack.

> Right now, I believe the US and many other
> nations, too, have laws and policies regarding tracing funds -- many
> stuff that was created to track drug and terrorist money, but, as
> expected, (by anyone who knows history) there's been "mission creep." I
> don't see why, if Bitcoin becomes a big deal with the feds or the IRS
> (or HMRC or whatever tax authorities exist), governments wouldn't simply
> apply these to tax Bitcoin users.

The side effect of this, making every taxpayer a criminal by default, is
to make much more cheaper for the same taxpayer to act criminally
against the government agents.

> And governments could simply pass more laws or put into effect policies
> that cover Bitcoin -- maybe calling for records to be kept lest stiff
> fines be levied and jail sentences imposed.

It didn't worked so well with filesharing.
And people didn't have a so compelling reason to share files.
Where money talks.

Having destroyed centralized enemies of the government in the matter of
alternative currencies, the government is left with decentralized
enemies. It is all about costs. If the costs to going after one it too
high and the risk to be caught too small, the government can jast draw
down the battle but can not win it.

Mirco