Dr. Helen

Is Bitcoin Just a Form of Tax Evasion?

I have been reading a book about bitcoin called The Truth Machine: The Blockchain and the Future of Everything. But is cryptocurrency like Bitcoin the future of truth or tax evasion? Here is what the authors of the book say:

In The Truth Machine, Michael J. Casey and Paul Vigna demystify the blockchain and explain why it can restore personal control over our data, assets, and identities; grant billions of excluded people access to the global economy; and shift the balance of power to revive society’s faith in itself. They reveal the disruption it promises for industries including finance, tech, legal, and shipping.

The book has a few digs at Trump, and at one point, I recall he was called a liar. I found this kind of ironic after reading a piece at CNBC on how no one is paying taxes on bitcoin:

A tiny fraction of Americans are reporting their cryptocurrency transactions to the IRS, according to a study from Credit Karma Tax.

Fewer than 100 of 250,000 federal tax returns prepared and filed so far this year through the company have filed a Form 8949 for cryptocurrency gains and losses, Credit Karma said Tuesday. That’s less than 0.04 percent of filers.

“Generally, Americans with more complex tax situations file later in the tax season, especially if they expect that they’ll owe money,” Credit Karma Tax General Manager Jagjit Chawla said in a statement. “However, given the popularity of Bitcoin and cryptocurrencies in 2017, we’d expect more people to be reporting.”

The company said 52 percent of its filers this tax season are millennials, and just 14 percent are at least age 55.

The average bitcoin purchaser is a millennial:

Those few Bitcoin investors are of a fairly consistent demographic. An overwhelming 71 percent of them are male. The majority — 58 percent — are young, between the ages of 18 and 34 years old. And unlike the broader U.S. population, nearly half of them are minorities.

So if almost no one is paying taxes on bitcoin, is Bitcoin a truth machine or a tax evasion scheme? If Trump is such a bad guy and a liar, then what are the Bitcoin users who evade taxes while the rest of us pay for them?