Bitcoin was once viewed as a means to opt out of violent, legacy financial systems. Now, it is being co-opted by the very same, and zealous newcomers to crypto think that’s a good thing, while still giving lip service to peer-to-peer values. Ignoring the problems with fiat money, they beg political interests and bad actors to regulate Satoshi’s digital innovation. One such actor, Joe Biden, has been in the news recently complaining about not getting enough tax money from struggling Americans. To Biden and his elitist ilk, the destruction of crypto’s possibilities for economic sovereignty is a goal. Taxation is a key means to make that happen. To the crypto OGs, taxation is still theft, and permissionless, peer-to-peer exchange is still the answer.
Stop the Sugar-Coating: Why Taxation Is Extortion
There’s an old saying that goes: “you can’t make ice cream out of sh*t.” It’s crude, maybe, but speaks to an important reality in both the realm of ideas and the physical world: something is what it is, and it ain’t what it ain’t. You can’t make a palace from a porta-potty, and you can’t make the literal stealing of taxation, inflation, and fiat currency devaluation into a good thing for any sane society.
Taxation is a euphemism for extortion, writ large. Advocates of taxation (the sustained and systematic extortion by the state for one’s entire lifetime) make the same arguments for forced financial servitude as slavers in the American south made for their own brand of brutal, physical tyranny. Appeals to tradition, humanitarianism, fear-mongering about economic collapse, warnings of violent chaos and anarchy are all here. “But who will pick the cotton?” has found its modern analogue in “But who will build the roads?” Or, as this article alludes to: “Who will buy the kid sniffer his ice cream?”
A simple illustration of why taxation is theft (just below) will be a helpful introduction. But first, here is the definition of extortion:
Extortion is defined as “the practice of obtaining something, especially money, through force or threats.” The basic problem with the fiat system of money and its printing and taxation is violence. As Satoshi encoded in the coinbase parameter of block zero, or the genesis block of the Bitcoin network:
The Times 03/Jan/2009 Chancellor on brink of second bailout for banks
Because of the state’s legalized extortion, we foot the bill for such bailouts, while the ones on top of the pyramid scheme simply print more money if they need it, and hoard hard assets. Legal definitions make a point to note that such violence and threats are only bad if “unlawful” or not issued by the IRS, but again, this is just another way to make soft-serve from excrement, for the sake of those in power.
The United States Internal Revenue Service (IRS) declares in no uncertain fashion how they obtain their money. Here is a refresher. The so-called “voluntary” tax system in the U.S. “is not voluntary and is clearly set forth in sections 6011(a), 6012(a), et seq., and 6072(a) of the Internal Revenue Code.”
What happens if you don’t pay is simple:
Failure to file a tax return could subject the non-compliant individual to civil and/or criminal penalties, including fines and imprisonment.
So, force and threats are clearly used to obtain tax payments, even from non-violent people. Taxation is thus extortion, by definition.
What’s worse, if somebody attempts to resist being placed in a cage for not wanting to pay for a war overseas with their money, not wanting to answer an ominously-worded question about crypto on their tax forms for safety reasons, or not feeling their money is anyone’s business but their own, IRS agents will attempt to subdue them to complete the state-sanctioned kidnapping, up to and including killing them. And, almost laughably in a very dark way, even dying doesn’t end one’s supposed tax liabilities.
A Simple Illustration
On to that illustration I promised. If your neighbor knocks on your door raising money to build a skate park for the neighborhood kids, you can either donate, or decline to do so. This is basic, civilized society. However, if said neighbor refuses to accept “no” for an answer, and pulls a gun on you, this is rightly viewed as violence. A criminal activity.
Even if that neighbor returns with five other people from the neighborhood making the same threat, the extortion would still not be justified. And if they return with the entire community or the whole town? Or everyone in an area of, say, 54,000 square miles? The logical fact remains that this example of threatening violence — and ultimately deadly violence — to acquire funds, is rightly viewed by logically consistent and ethical individuals as criminal, even if it is for something viewed as positive, like a park for kids.
So when we take New York State, for example, with its land mass of just over 54,000 square miles like in our illustration above, why is it suddenly, magically okay for another group of mere human beings (now called “the government” and “the IRS”) to issue that same exact threat, demanding donations at gunpoint?
Donations, mind you, to pay not just for parks and roads, but for wars which unceasingly murder innocent people, so-called public services which are horribly mismanaged (like police protection, which is often not provided after payment and is not even legally required to be provided), and buildings and countries we cannot enter if we don’t take an injection of a largely untested mRNA spike protein cocktail. These are so-called services and goods one cannot opt out of, even if one doesn’t use them.
IRS agents practice collecting voluntary donations. Source: clickondetroit.com
Even viewed from a strictly economic lens, this centralized extortion model is a recipe for disaster. There is no price discovery, with market signals of supply and demand disrupted. No competition is allowed, even if the services are failing. The sole, central societal “node” called the state determines what funds are needed arbitrarily, who they may go to, and what may be done with them.
On top of this, the fiat currencies taxed are themselves perpetually depreciating and recklessly destroyed through quantitative easing and inflation, resulting in exponential loss of value to the holder who is forced to use them at the exclusion of more sound alternatives. The advent of bitcoin saw a light at the end of the tunnel here: a limit on printing money, the end of funding wars and pilfering with inflation and taxation.
Inflation can be viewed as a hidden tax. Image source: usinflationcalculator.com
Leaving economics, viewed ethically, taxation is a psychopathic proposition: violation of the non-violent to achieve non-violence. People throughout history have been generally willing to pay for their own needs, and even to provide what support they can to their immediate communities where possible, without the need for violence being leveraged, let alone systematic violence. To argue that people do not do this would be to detonate the position that government (themselves just people) could or would do it. It would also be a strange admission of a self-destructive impulse.
Abandoning Political Parasites for P2P: Original (Gangsta) Ideas Never Die
I need to get to the ice cream warhawk. While the new crypto zealots keep talking on Twitter about the “financial freedom” of merely HODLing BTC and weirdly asking for more laws and rules, roughly 87,000 new IRS employees could be hired in the United States over the next decade to ensure everyday people in America cough up their pennies on time. The Treasury Department document the 87,000 ballpark number comes from is interesting, as it delves into crypto as well, noting:
Another concern is that an information reporting regime will shift taxpayers toward a greater use of cash … Still another significant concern is virtual currencies … Cryptocurrency already poses a significant detection problem by facilitating illegal activity broadly including tax evasion.
Bitcoin.com News recently reported that the Biden administration is speaking out against proposed legislation that would decrease funding for the tax agency. A statement from Biden’s camp noted the funding at stake “enables the IRS to crack down on large corporations and high-income individuals who cheat on their taxes.”
But looking at who the struggling IRS actually targets and always has cracked down on, on both sides of the BS bi-partisan aisle, tells the real story. The article goes on to note:
American crypto advocates have been plagued with anxiety over the advent of a new tax reporting requirement that will necessitate digital currency exchanges, Venmo, Cash App, Paypal, Airbnb, and eBay sending 1099-K forms to their users. The IRS, with its unyielding gaze, has set its sights on payments of $600 or more for goods and services received through a third-party payment network.
The “original gangsters” of crypto, those OGs who saw immediately that bitcoin could provide a way for any human, regardless of political status, income, or cultural background, to transact value freely above and beyond this restrictive statist quo, may seem to have thinned out a bit. But we’re still here.
Bitcoin is powerful because of the idea behind it. And any system that facilitates free exchange without the need for third parties can open the door to empowering decentralized communities and independent (and interdependent) “social nodes” of individuals focused on order and peace — not chaos, pilfer, and death.
The more folks can finally see beyond the euphemisms — and they will, sooner or later — to the paradigm-busting truth that humans don’t need to be controlled by archaic, violent systems of governance and taxation, the sooner the shift to a better way. This idea cannot be killed, whatever the tool to help it work may be. Luckily, it is already out of the bag. So let the old kid sniffers (and other literally ungoverned parasites at the top of the global Ponzi) work for their money, like every honest person has to.
There is a risk to permissionless, peaceful living, but the risk of passively watching free market exchange die — and allowing incalculable evil to envelop the lives of future generations — is arguably much greater. Any little permissionless action helps. Any little word about freedom and non-compliance to a friend or stranger. Even sending a couple obfuscated BCH sats to someone today for a cheeky ice cream cone.
To learn more about free exchange, self-ownership, and voluntaryism, see here, here, and here.
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Graham Smith
Image Credits: Shutterstock, Pixabay, Wiki Commons, Prachaya Roekdeethaweesab / Shutterstock.com
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