6mo ago

Gaetz unveils bill allowing bitcoin tax payments

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Considering the extreme fluctuation of Bitcoin, it feels like that's a payment that has to be processed and cashed out within an hour of the filing for the Federal government to not get screwed.
- They can easily do that. Bitcoin payments process in under a second for < 1% fee (Lightning) or 10 minutes for roughly $1-$2 in fees (main chain), selling on an exchange is instant. The federal government has also held onto some BTC long-term from criminal cases, that ended up being a pretty good investment decision for them. They hold onto lots of currencies.
  In any other Bitcoin payment situation, you are credited the value of the BTC at the time you send it. What the receiver of that BTC does with it later or how its value changes is not your problem. Same with any other currency. The IRS isn't coming after you for an additional 20% from your last return just because a US dollar buys 20% less bread than it did when you made your payment last tax year.
  
  That's beside the point, because you don't pay taxes in denominations of "loaves of bread", you pay them in US dollars. If you pay with an asset that is wont to change its value in US dollars on a whim, that's a gamble for the government. There's a reason people don't regularly pay taxes with stock options.
  
  My point is that the US dollar fluctuates in value as well. It loses purchasing power, by design, because it's an inflationary currency. Which means it loses value over time. BTC might go up, it might go down, but it's not literally designed to lose value. 2-3% per year is Fed policy goal in "good years", our recent inflation has been bad because it's beyond that.
  The US govt can swap BTC for USD or other currencies instantly if they want to.
  
  The US dollar is never worth less nor more than than 1 US Dollar. If you owe a debt in USD, the size of that debt does not change based on the purchasing power of the dollar.
  
  Yes but that dollar buys less stuff. And that 1 dollar represents 1/total supply, and total supply increases. It's literally worth less even if it is still "one dollar".
  
  Yes, but your debt was also worth less.
  
  Yes agreed

39 comments