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Comment by vaxintar | Hacker News Reader

Thanks to Ethereum (and specially now that there are L2s which have cheaper tx costs) I can distribute revenue from my business between different types of collaborators, without incurring in paying 120% in taxes for having "employees".

In Argentina if someone works for you more than 15/20 hours in a given month you are legally obliged to hire them for, at least, 3 months. The legislation doesn't fit in tons of cases, and led the country to over 35% of working people outside the legal framework.

Crypto gives people living in dysfunctional democracies a chance to participate in the global economy, something that people living in Europe or North America cannot comprehend.

And don't even get me started on why ownership of your money is important but if you are willing to read take a look at this: https://en.wikipedia.org/wiki/Corralito

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This really is the key thing. Crypto allows for the evasion of laws. That's its key contribution. In authoritarian states this is probably a net good. In the rest of the world this is a harm.

"The killer app for this technology is crime."

I'm not condoning crime, but do you recognize that changing laws in an authoritarian state is next to impossible right?

Lives lost in Venezuela doing a serious attempt at changing. Do you prefer blood shed on streets?

I think that allowing people to protect themselves from authoritarian governments is often a good thing. I also think it is important to understand that if this is the killer app then we need to be honest about what it is and how that affects people in states that are more just. The benefits to those suffering in Venezuela cannot be separated from the harms done to people in non-authoritarian states.

Tax evasion is not its killer app, but I reckon cryptocurrencies can be misused that way.

Tax evasion is possible with or without mechanism. Real world example in Argentina: the way most landlords evade taxes is by charging tenants in cash. They expect you to go to their place with an envelope full of 1000's ARS banknotes.

So far I've not seen rents paid in cryptocurrency, but by extension, would you say cash's killer app is tax evasion indeed?

Yes, cash's killer app is crime, too, which is probably why governments like China don't want it.

People making the argument that payments are hard to trace with crypto & that's the reason it should be banned or ignored are 1) ignorant because crypto transactions are easier to trace than cash and 2) making a dangerous argument against cash for which authoritarians will be thrilled to have support

I'd say crypto is not very good for tax evasion. The immutable record on a blockchain thing may be a pain compared to cash in hand.

Nobody "prefers" it (psychopaths need not apply), but against a regime where literally their prevention method to getting replaced is "bloodshed", what is your suggestion?

To starve the government financially, through mechanisms of tax evasion.

As a very last resource, because again, I do not condone crimes, but: When tyrants rule, it's our human right to disobey.

Would you accept to be subservient to a power structure that doesn't work for you? For the "We The People"? Vote them away yes, given voting is not a deceptive theatrical show like it is in Venezuela. So, what are the other alternatives? Ruling out violence of course.

> To starve the government financially, through mechanisms of tax evasion.

I'm curious if this has ever worked before.

I accept that next time might be different, but previous examples would add to your argument.

Some folks in the US have been attempting to starve the beast for approaching half a century now. The only thing they have succeeded in doing is passing on trillions of dollars of debt to their children and grandchildren. They keep trying though.

I think tax evasion won't ever work as mechanism to fight tyrannical governments because it's your neighbor who suffer the lack of funds, not the ruling class.

I think more specifically it enables the evasion of current unlawful activity prevention controls, however evasion overall is a questionable assertion with the inherent traceability of public ledgers.

> In authoritarian states this is probably a net good

Crypto doesn't fix the problem with authoritarian states (or the drug war, or backwards prostitution laws), though, it's just another workaround. There's no shortcut around actual social change.

And the idealistic notion that crypto could allow mass civil disobedience didn't really pan out; these days, "civil disobedience" is usually too marketable and monetizable for it to not get co-opted by scamvangelists and corporations (which reminds me of the Black Mirror episode where they monetize the guy's suicidal protest against everything being monetized).

"If you have nothing to hide you have nothing to fear."

I'd say the ability to avoid penalties from "victimless" laws is beneficial, irrespective of the governing state.

Tax evasion is not a victimless crime.

It's actually easier to perform tax evasion with cash, as it doesn't leave a transaction history.

There's nothing to debate. Everyone living in society benefits from taxes paid - food inspected, fire service and toll-free roads provided, and so much more. Evading taxes is theft of service from everyone.

There's so much value in roads. You'd think that they could be funded on a pay as you go voluntary model rather than expropriation under penalty of imprisonment. Not to mention the opportunity costs of misallocated resources. If there were nothing more to say here, centrally planned economies would deliver the utopia their proponents promise. Somehow history hasn't played out that way.

I'll allow that pragmatism has an important role in tempering the extremes. Claiming that there is "nothing to debate" is a leap into absolutism.

Taxation is not a victimless crime.

Taxation is the price you pay to live in civilization. You can always give that up. Most people prefer the benefits they get from it though.

I literally cannot give that up. The US government demands taxes on all of my global income, will not allow me to renounce my citizenship without another citizenship, and the state department refuses to grant me a passport or disclose the reason why they won't grant me one, even with FOIA requests.

I'd gladly pay $100k for the privilege of renouncing my citizenship and legally becoming stateless. I'd actually have more rights as a noncitizen than I do as a citizen these days inside the US, especially when it comes to KYC and AML rules.

The federal government is going to print the needed funds regardless of how much tax income they receive

It is, under any remotely common usage of the term. A victimless crime is one where the directly involved parties all consented to the action.

If you consider the government itself as a "directly-involved party" then you would consider no crime to be victimless, since it's always the government who prosecutes a crime.

If you invoke something like "society at large" as the victim, then again you can exclude any action from being a victimless crime if you happen to think society is worse off if that action happens (e.g. certain sexual acts between consenting adults, certain types of drug use, etc.).

Tax evasion, along with similar crimes like smuggling and insider trading, are widely listed as examples of victimless crimes.

net harm in other parts of the world?

Illegality is not directly corelated with harm, sadly.

I mostly agree - but would argue its a lot more gray than black & white.

>in the rest of the world is a harm

Have you ever considered what might happen if that distant, authoritarian state suddenly appeared within your country? It has happened many times before, and I don't see why we should think it won't happen again.

Things turn around faster and faster as technology progresses, at least from my perspective

> In authoritarian states this is probably a net good. In the rest of the world this is a harm.

Most of the world is authoritarian and that's if you consider that the Western world is not.

> Crypto allows for the evasion of laws.

Uber allowed anyone to drive without a taxi medallion.

AirBnB allowed anyone to turn a home into a hotel.

Amazon allowed anyone to buy a book online, without having to go to a book store.

Not everything is about evasion of laws.

The first two examples were probably illegal (taxi laws, zoneing laws) but since big tech did it they weren't crushed and now it is de facto legal.

"probably"... also ask yourself who lobbied the hardest to make those laws...

Uber was absolutely about the evasion of laws. They went out of their way to break the law and to avoid detection of their lawbreaking. It's the main reason why I will never use Uber.

By extension of the argument, does this mean you also won't use USD? Plenty of people and even governments use it to break laws too.

That's not a parallel argument. It would be a better one if I avoided using Uber because other people used Uber for criminal activity. That's not my stance. My stance is that I avoid Uber because of Uber's criminal activity.

“I avoid USD because of US govt criminal activity.”

Great examples. Heavily subsidized under-employment scheme, profiteering squeezing residential space out of communities where young people are paying upwards of half their income in rent and giant logistics sweatshops laying waste to local commerce.

"how it started / how it is going" analysis of what happened to some, not all, markets.

Your first two examples were predicated on the evasion of laws, and the taxi example literally states what law it was evading.

Tax medallion's were created by the Taxi industry to regulate "cabs" and keep the grift going.

Using your own car as a way to give people rides, and get paid for it, fell into a grey zone because nobody had actually thought to do that before.

Let's also not forget that this is a global business with different "laws" all over the place.

LOL. Uber literally had systems that would detect suspected LE usage and actively lie about rides.

AirBnB openly listed properties that it knew (NYC) were illegal and had been told so.

Wasn't the same thing said about a lot of encryption techniques which are now widely used for non-criminal activity?

Not by thinking people

I bet the people making the argument at that time were convinced they were "thinking people."

Exactly, or to state the inverse: When a decent legal system can be leveraged by the actors, competing approaches all pull ahead.

[US specific] Without evasion of laws, women wouldn't be allowed to vote, black folks would be slaves, interracial marriage would be a crime...I can go on and on. The ability to disobey unjust laws is absolutely essential to the health of a society.

And what unjust laws in the US is crypto letting people circumvent?

paying for marijuana?

If that's the best it can do, meh. It's already legal in what, 40 of the 50 states? Sure, not at the federal level, but that'll happen sooner or later.

Plus, I think the vast majority of people pay for it without cypto as is, no issue.

Women didn't get the vote by illegally voting, slavery was outlawed in the end not just circumvented - the ability to change unjust laws is what matters in the end for the health of a society.

Just some sort of disobedience technology without plans for change and active work on that (including majority building and policy proposals) is not going to cut it.

You want functioning societies not some dystopia with a tech underground.

Wow you.. really shot your argument in the foot. All those unjust laws were, you know, changed. They weren’t evaded. And there are mechanisms to challenge laws you don’t like that don’t involve simply deciding you’re not going to obey them. But those mechanisms involve real costs that tend to blow away the moralising of most crypto bros.

If those unjust laws were changed what makes you think that regressive tax laws that keep coming up year after year won't be changed in the future?

>And there are mechanisms to challenge laws you don’t like that don’t involve simply deciding you’re not going to obey them.

I'm curious about those mechanism to challenge laws.

Is this true?

I mean, let’s buy in on the idea that it is good to enable tax evasion in dysfunctional countries, just for the sake of argument.

Isn’t the bitcoin ledger publicly visible? It seems to me that bitcoin isn’t providing a good way to perform tax evasion. It is creating a totally immutable record of tax evasion, that local authorities just aren’t looking at yet. This is, like, the last place I’d store records of my crimes. If anything it seems more like a (maybe) unintentional honeypot.

Of course, it is possible to obfuscate your identity through various means when using bitcoins, but it doesn’t happen automatically. And the US government basically beat Tornado cash, right? If you want to be anonymous on the ledger you have some pretty scary enemies I think…

Crypto allows evasion of banks for a direct money transfer, this is key thing. The laws are funny in that area.

> I can distribute revenue from my business between different types of collaborators, without incurring in paying 120% in taxes for having "employees".

I'm always fascinated when people come right out and say that the primary use case of crypto is evading laws and taxes.

The strangest part is that using crypto doesn't actually exempt them from the law any more than using a bank account to wire money around. There's just something about crypto that makes some people think it's a safe haven from legal oversight.

There's just something about the "techiness" of cryptocurrencies that makes people think current financial laws don't apply to them.

You're engaging in tax evasion by misclassifying employees as IC's. Call it whatever you want, the essence doesn't change.

Tax evasion for a business that makes less than 5k usd a year in reveneu?

If you think that's a crime you are delusional about the uses of money.

Crypto allow me to create a structure where people can work in an animal health control for rural parts of the Patagonia (which is around 2000000 squared kilometers, five times the size of Germany and has 1/80 its population) and provide this kind of services for free in many cases.

I can now quit/leave/die and anyone can take my place to coordinate it in the same immutable structure.

And the best part? The state can track all the transactions if they really want it. But I'm sure no one is going to work to find out how six veterinarians got 125 USDC in their digital wallets in July 2023.

> If you think that's a crime you are delusional about the uses of money.

If it wasn't a crime, why do you have to use cryptocurrency for it?

Or is your definition of "crime" more abstract, not a literal interpretation of the law?

Because to hand over the money I'd need to travel 1000 KMs [1].

And if you want to know "why you don't simply transfer through a bank?" I encourage you to read the Corralito wiki.

Just before the Corralito ended, there was an asymmetric pesification of bank deposits. This meant that if you had 100k USD in your account on Monday, by Friday it would be converted to 100k ARS at a rate of 4 ARS = 1 USD, effectively leaving you with just 25k USD.

This event left a general feeling of discomfort regarding leaving real money (in terms of store of value) in the bank.

1. https://www.google.com/maps/dir/Viedma,+R%C3%ADo+Negro+Provi...

> If you think that's a crime you are delusional about the uses of money

Tax evasion is against the law and therefore is objectively a crime. Whether or not the law is good is a different discussion entirely.

Maybe you have a heavy US centric point of view?

I don't condone tax evasion, but if I can't work because the State wants to go broke before I can even start running my business sorry but no one will do it.

I suspect that you misunderstood my point. My point is that if you are doing something that is against the law, then it's against the law by definition. It's just logic, not cultural bias.

I'm not commenting on whether this particular case of lawbreaking is morally supportable or not. Even if it's 100% morally justified, it's still lawbreaking.

Ahh, now I got you.

Perhaps it's against the written law, but I think in most countries I am aware of, laws are subject to the judges' interpretation.

If you want to start a business you need capital. No access to capital does not give you carte blanche to break the law.

It's not the magnitude, it's the mens rea (motive and intent).

Even if the laws are stupid, the killer feature you are describing is called crime.

Yes and we need tools to route around stupidity to keep checks and balances on stupidity. Otherwise locked-in stupidity can get even more stupid and that’s how suffering occur at scale.

If you don't like the law, lobby politicians to change it.

You don't get to decide that speed limits are stupid and go 100. You don't get to decide that taxes are stupid and not pay them. You don't get to decide that rules against murder are stupid and ignore them.

Wait, why didn't you use these examples:

> You don't get to decide what to put into your body and smoke weed. You don't get to make a choice about your pregnancy and have an abortion. You don't get to not be a chattel slave in 1840.

> If you don't like the law, lobby politicians to change it.

Some laws are unjust and it's your duty as a human being with free will to disobey them.

Drop the persecution complex. You're being asked to pay taxes, not commit genocide.

If I pay taxes I can't pay wages.

If you can't afford to:

* pay a living wage

* pay your taxes

* comply with health, safety, and employment regulations

* comply with all the other laws (this is a crypto thread, so that includes weapons laws, securities laws, international sanctions, and so many more)

Then you don't have a valid business. You have no inherent right to run whatever business you think you want to.

Also, to your immediate claim, I do not believe you.

What I can't afford is to deal with a regressive tax legislation [], while trying to get US currency in the black market [2] to save and pay for imported goods and without a line of credit because the rate is ~190% and inflation ~130% [3].

I do pay my taxes, also think high worth individuals should be subject of taxation, but your rigid framework leaves out many people that use crypto as their only way to get paid and/or save money because traditional banking system is broken in their countries.

2. https://brazilian.report/liveblog/latam/2023/10/10/dollar-10...

3. https://www.bloomberg.com/news/articles/2023-10-12/argentina...

"amassing currency to purchase imported goods without a line of credit" is not a human right.

I'm sad that tariffs mean I can't bring in dirt cheap liquor from the Caribbean to sell for massive profits but that's not an excuse to not pay my taxes.

I disagree, it is if you need the goods to buy supplies for you to work.

If I need syringes to work, national syringes costs 3 usd a pack (and they are out of stock) and I can get the same pack for 85 cents in Chile, I'll exchange pesos crocante for dolar blue, cross the border to Chile and get them there.

I wouldn't call it human right, but the idea of amass currency to buy goods seems pretty essential for our modern life.

Although it's sad that tariffs make selling cheap liquor unprofitable in your country, I think we're thinking about different scales of income.

You're evading taxes and worker protection laws. Congrats I guess? If your business model is dependent on flouting the law, then maybe it's time to rethink the business model.

???

The workers are the ones who can't get a job because of the "worker protection laws" you evoke, so you clearly don't understand the problems of Latin America.

This structure only gives them an incentive to travel hundreds of kilometers to a ranch where a bovine died for unknown reasons, for amounts that a western european would spend in a single take-out dinner.

> If your business model is dependent on flouting the law, then maybe it's time to rethink the business model.

Or maybe it's time to rethink the law...

>I can distribute revenue from my business between different types of collaborators, without incurring in paying 120% in taxes for having "employees"

Paying in ethereum, gift cards, gold, etc doesn’t change if they are employees or reduce how much tax you owe

>Crypto gives people living in dysfunctional democracies a chance to participate in the global economy, something that people living in Europe or North America cannot comprehend.

Corruption (which tax evasion is a facet of) is how you end up with dysfunctional governments. Endemic corruption breeds corruption breeds corruption. Crypto facilitates corruption and crime, which is antagonistic if your goal is a healthy society or good governance.

>Thanks to Ethereum (and specially now that there are L2s which have cheaper tx costs) I can distribute revenue from my business between different types of collaborators, without incurring in paying 120% in taxes for having "employees".

That's not a technical feature, that's just tax fraud

Really, thats your selling point?

"Shitcoin allows easy fraud, destruction of employment, and subversion of laws we dont like at scale, because it's not a fiat currency"

Seriously, if that's your selling point, kill it with fire and bury it in the desert. (shitcoin, not you).

Yeah, well, that's just, like, your opinion, man.

If you associate crypto only with shitcoins maybe your twitter bubble is a bit fucked up.

Are you admitting a crime (tax evasion)?

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