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You misunderstand my answer.
I stated remove tax liability on MoE/payments use of BTC.
In other words when someone uses Bitcoin as a MoE/payment there is should be no tax.
This is not removal of CGT- where BTC is held as a speculative commodity seeking CG.
So, when you spend BTC there should be no tax- but currently in almost all jurisdictions spending of BTC is considered an asset disposal and so taxed for CG.
This is what I disagree with because it strongly discourages use of BTC as a payments protocol...removing a free market in payments...in favour of fiats hegemony.
Apparently in some countries like Germany and Portugal , if BTC is held for a certain time maybe one year or more then disposal is not taxed. This could be a solution. It still discourages short term speculation but allows use as a payment protocol tax free (once held for 12 months).
My preferred solution would be disposal for fiat is taxed as a CG- disposal for goods or services is not, at least up to an annual limit.
Bitcoin is a payments protocol and will ultimately fail if not used as a payments protocol.
The unfair, untrue and sly assertion by tax authorities that Bitcoin is always a speculative commodity and not a payments protocol undermines BTCs entire utility as a MoE payments protocol...its changes the narrative and usage of Bitcoin toward being a speculative commodity plaything- taxed, tracked and traced and increasingly not used for payments.
As payments use becomes increasingly rare the argument to ban private custody upon KYC/AML pretext becomes stronger and harder to resist... but they probably don't need to ban MoE use anyway because they have already so strongly obstructed payments via discriminatory tax treatment.
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I don't think I misunderstood, I'm just saying that for example an EU business transacting in USD is also taxed on cap gains if USD rises against EUR. Thus, if you're asking for a special status: Bitcoin > USD everywhere outside of the US then that's a hard sell and will be seen as favoritism. I'm not against it, I just don't think it realistic. I think KY made a law for state taxes like that recently though, but I can't help but feel that this is an outlier.
I do agree that for individuals tax on Bitcoin gains is nonsense and it could be easily fixed by making a very high cap so that the average person doesn't get taxed at all. It's anyway not worth the effort in most cases.
Personally, I'd like to see no tax at all, unless it's for damages, i.e. environmental tax.
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If a European business holds USD and makes payments in USD because they believe USD will hold value more likely than Euro they clearly have intent to make gain via capital gain.
If a citizen or business holds BTC because they want to make p2p payments free of rentseeking censorship capable intermediaries they are not clearly intending CG.
To tax citizens and businesses who hold BTC for reasons of integrity and enabling free market competition in monetary payments protocols is anti-competitive state monopolistic protectionism and inequitable.
Milei has stated his intention to allow people freedom of choice in payments protocols as this creates a healthy competitive free market in money, free of state sponsored monopolistic fiat debt leveraged usury. I believe he is 100% correct on this and a free market in monetary protocols would most likely strengthen any economy where it is adopted.
Bankers and governments have misused their fiat hegemony too long and are clearly will be very reluctant to relinquish it.
We need to examine why- because it is we who pay the rent on their fiat usury and debasement.
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If a European business holds USD and makes payments in USD because they believe USD will hold value more likely than Euro they clearly have intent to make gain via capital gain.
But that's not what I'm saying. What I'm saying is that if you have a long term contract with a US supplier and your contract is expressed in USD while your accounting is in EUR, you have to translate these USD to EUR. This is simply an accounting rule that I have only seen exempted in Turkey and nowhere else to my recollection, where, mind you this was also a long time ago, you could have TRY+EUR+USD on your books without FX recognition; not sure if that is still true.
Now, everywhere else, if USD goes down against EUR, you had a P&L for USD that was worth X when you booked it, but then appreciated to X+1, then for tax reasons you have to count the +1 (depending on jurisdiction) either as cap gains or as simple income (which is often taxed even harder.) In some places you can discount fx losses against short-term cap gains (i.e. in the US you can do this) but not long-term.
What would help in the US would be to have preferential rates for this, i.e. treatment of BTC as a common currency, not a "speculative asset". But I don't think that the taxing is going away unless an exception is written into law.
it is we who pay the price of their fiat usury and debasement.
If I had a replicator I'd replicate myself 5x just so I could 500% agree!
We do! So we have to find ways to either change "them", or opt-out. Personally I've chosen the latter, because I don't trust democracies - I guess I'm that arrogant. So I don't vote anymore and I get to file for 0 taxes owed every year in the country where I'm tax-resident. In return I have no state-sponsored healthcare, no social security, nothing; I've opted out of all the benefits too.
Thus far I'm doing reasonably well. I would have done better for myself if I'd just complied but I'd be unhappy for being a slave. I hate overlords.
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If you operate under one fiat monopoly for tax purposes and account denominate sales in another fiat currency then relative changes in the worth of those currencies can be construed and will be seen as a CG or CL for tax purposes.
Fiat monopolies are competing with each other and anyone under one monopoly can expect tax on any attempt to escape.
That is however a far cry from a citizen or business using Bitcoin as a MoE where from the businesses perspective the amount charged for any bitcoin sale is immediately recorded at the current BTC/fiat exchange rate and that rate is adjusted as sales occur over time.
The business is still going to pay exactly the same income tax in fiat as it would whether it denominates in fiat or sats.
I am sure many here would be curious to know how you avoid all taxation ans nearly all tax jurisdictions now charge sales taxes so to operate a business you must file returns for sales tax and to be consumer of anything you pay a sales tax.
Can you elaborate on how you have achieved your tax filing free status?
Even El Salvador has sales taxes- is there anywhere that doesn't?
If you are only paying sales tax and zero income tax perhaps you are domiciled in a tax haven which is probably not an option for most people.
From my perspective I accept some taxation is required to have a functional law and order, defense and legal system that protects property rights and would go further to being happy to pay tax to fund free education and health care, but ultimately opting out is a cop out whereas taking an active role in democracy while not easy is what is required.
There has never been a wealthy and strong economy without an equally strong and healthy government and without mass involvement and participation governments tend toward corruption.
A free market in monetary payments options would reduce the level of corruption that has become chronic is western democracies where bankers now effectively hold more lobbying power behind the scenes than voters.
We need to challenge their state sponsored fiat based debasement, usury and rentseeking.
Bitcoin being accepted as a tax free MoE protocol would signal to voters a significant reduction in the banker sponsored corruption in their politics!
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If I buy something in a place where there is sales tax then of course I have to pay it. There are plenty of places with no sales tax though. As for income tax, you already named 2 jurisdictions where it is possible. Just have to accept sats and no fiat, time your income well, practice patience and not spending more than necessary.
As for participating in actively changing society, its only needed if you believe that Bitcoin mass adoption is desirable. It isn't to me. I'd like some more adoption but I don't need every soul on this planet to transact in Bitcoin. Also we don't have any tech to support that yet. Maybe in the future.
P.S. I agree that allowing a capped exemption for people (especially where they spend sats rather than sell for fiat) would be a great step in the right direction and would enable at least some increased competition in the MoE payments marketplace.
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