HomeBitcoin RegulationCurrent System Lets Well-Connected Break Law, Bitcoin Lets Everyone Kyle Torpey 03/03/2014 Bitcoin Regulation, Economics, News 3 Comments Bitcoin lets everyone hide money in briefcases. One of the most troubling aspects of the law in almost every country is the fact that it is rarely applied in a completely equal manner. In most cases, there is one set of laws for the politically well-connected, and another set of laws for the common man on the street. Whether you’re talking about financial regulations or any other aspect of the law, there always seems to be a certain group of people who are able to get away with not following the “rules of society” on a regular basis. It would be great if the law was always applied in an equal manner, but justice doesn’t tend to work that way. In the near future, Bitcoin and other technologies will force fair and equal law upon everyone. Tax Evasion The recent case of tax evasion by Credit Suisse customers is a prime example of the well-connected having the ability to evade taxation. The rich have the ability to pay for accountants, lawyers, and Swiss bank accounts, but the average guy on the street usually has to handle everything on his own. To be honest, I don’t necessarily blame them. Who would want to pay for drone strikes that have killed countless innocent civilians or an intelligence agency whose main purpose is to collect every bit of data on the Internet? If Bitcoin were to become a widely used form of payment, collecting taxes would become a rather tricky situation. There is no paper trail to follow in Bitcoin, so the government would be left to only collect taxes from honest citizens who believed in paying their “fair share”. It’s possible that Bitcoin would actually force a move away from the income tax and towards more sales and property taxes. Bitcoin would not prevent people from avoiding income taxes, but they would still have to pay taxes when they are participating in commerce at a physical location. Even collecting sales taxes would be somewhat difficult because there is no reason a merchant could not simply lie about the number of sales they made during the fiscal year. Property taxes and tariffs would likely be some of the only forms of taxation that could be practical in this new world. It’s rather easy to hide profits in a Swiss bank account, but it’s a bit more difficult to hide a mansion or imported goods. Money Laundering Laws against money laundering are basically laws against financial privacy. These are laws that say you’re not allowed to send money to anyone in the world without the government or a bank knowing about it. Since banks are the ones who are usually in charge of reporting money laundering, it makes sense that they would also be the ones who have committed most of the large scale cases of money laundering in recent history. And what happens when one of these banks get caught breaking these laws? Well, we couldn’t possibly throw anyone in jail. After all, these banks are “too big to jail“. On the other hand, when a 24-year old gets caught basically selling bitcoins to someone who sold bitcoins to someone who may have bought drugs with those bitcoins, we should throw the possibility of 20 to 30 years in jail at them. If we ever enter a world dominated by a Bitcoin economy, the idea of enforcing money laundering laws goes out the window. As those laws are removed, so does the ability to choose how those laws are applied to different groups of people. Removing Barriers to Entry What Bitcoin does in these cases more than anything else is remove barriers to entry. Whether you’re talking about opening a Bitcoin exchange or simply avoiding taxes, the current system basically applies certain barriers to entry for these kinds of activities. The average person on the street cannot collect the funds necessary to register as a money services business, just like they don’t have the money to pay someone to help them evade taxes. Barriers to entry not only help the well-connected by basically creating government-backed monopolies, but they also hurt everyone else in the entire economy. It shuts down innovation, and it also widens the gap between the haves and the have-nots. The point of the American Dream was that the United States was a level playing field where anyone could succeed. That dream is now far gone, but a new one is being created through various forms of new technology, such as Bitcoin.Earn Bitcoin Points by Registering a user on CCN or Join our Mining Competition! banksbitcoinmoney launderingregulationstax evasion 3 Responses Chris 14/03/2014 Hey, just wanted to let the author know that I enjoyed the read! I have an issue with being too technical with my explanations, and assuming individuals draw the same conclusions as me which prevented me from presenting cryptocurrency in a concise/understandable fashion to my co-workers. This read helped spark their interest, so thanks!!! Log in to Reply Caleb Chen 03/03/2014 Financial Equality? We must ban it /s. Log in to Reply Mat 03/03/2014 Yeap ! it’s unfair for the richest !! Log in to Reply Leave a Reply Cancel Reply You must be logged in to post a comment. Earn Bitcoin Points by signing up.