Categories: News

Can Tax Reforms Impact Bitcoin Usage And Make IRS Obsolete?

One of the many things everyday consumers are not exactly fond of is the entire concept of paying taxes every year. Especially in the US, services like IRS have a worse-than-bad reputation among the general public, even though these people are only doing their jobs. But if it’s up to several Republican presidential candidates, the IRS won’t be around for much longer. Imagine the effect this would have on Bitcoin as well.

Remove The IRS From The Equation Altogether

On paper, it is all but impossible to imagine the world where there is no IRS or taxation in place. However, there is a lot of confusion as to what the IRS does, as their main job is to ensure people properly file their taxes. Simplifying the concept of taxes could effectively put the IRS out of business completely.

Tax reform proposals are nothing new under the sun, as various countries are working to achieve that goal. In theory, this is much easier said than done, as the current tax system has been in place for several decades. Any attempt to change this system could have catastrophic effects, although a reform is really needed.

That being said, imagine a world where filling out taxes is as simple as using an application on a mobile device. Or for the people preferring to fill in paper forms, there would be a postcard-sized one-pager. Unfortunately, this would not remove the need to verify every tax submission, thus making it pretty much impossible to eliminate the IRS.

Whether or not this “new breed of tax agency” would still be called IRS, is something that can be debated upon later. There will always be a need for some form of “overarching body” to collect the taxpayers’ money, as revenue agency have to keep tabs on who is paying what amounts and when.

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To give an example of how a tax reform could look like: one candidate is proposing to replace the income tax with a national sales tax. If this idea were to come to fruition, citizens will no longer pay taxes on income, investments or savings, but only on the purchase of goods and services. In the end, there would be more money for consumers, but whether or not this is a viable business model, remains to be seen.

Regardless of how the tax system is to be reformed, it will always be a bit of a mess, which requires a ton of work to be sorted out. While there is a case to be made for making the tax filings a lot easier, it will not result in making the IRS completely obsolete overnight. But it gives something to think about, that’s for sure.

Bitcoin To Benefit From Revised Taxation?

Depending on where you may live, Bitcoin may or may not be taxable in your country. Assuming it is, the ruling creates a bit of a bottleneck as far as filing taxes is concerned. Simplifying the entire taxation process could prove to be beneficial to Bitcoin users all over the world as well.

Source: CNN Money

Images credit 1,2

JP Buntinx

JP Buntinx is a FinTech and Bitcoin enthusiast living in Belgium. His passion for finance and technology made him one of the world's leading freelance Bitcoin writers, and he aims to achieve the same level of respect in the FinTech sector.

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