John Mcaffee stated that governments fear cryptocurrencies because they can’t tax them.
Cryptocurrencies have received a great deal of attention from institutional and individual investors because there’s a good deal of cash to be made. From day trading into cryptocurrency mining, there are a lot of ways to make a profit in the digital asset space. First Coin Offerings are becoming one of the most common forms of cryptocurrency investments in the last couple of months. Important investors like venture capitalists and hedge funds have been pouring millions of dollars in First Coin Offerings, in the expectation of selling the tokens at an adequate profit. With this much benefit being made in the cryptocurrency space, many specialists think that authorities will be unable to correctly tax them.
Can Cryptocurrency Profits be Properly Taxed?
Creator of MGT Capital Investments, John McAfee, believes that it’s technically not possible for authorities and taxation agencies to properly monitor all of the gains and tax them so. Since the nature of cryptocurrencies is that their decentralization aspect it isn’t feasible for governments to prove whether or not a citizen is holding a certain amount of coins.
In a recent post, John Mcafee said after:
Our income taxes are the greatest source of revenue, but if everybody’s using Bitcoin, the government doesn’t know what your income is. They can’t tax it, and if you choose to say I didn’t have anything, they cannot prove otherwise
He also further claimed:
It will eventually frighten every nation state, but it doesn’t matter what they do, there’s no way you can create a law or to legislate something that will stop Bitcoin or any cryptocurrency because technically, you cannot.
Mcafee considers that since cryptocurrencies are extremely difficult to monitor, authorities might fear that individuals will attempt to conceal their gains through cryptocurrencies. Some countries have already suggested to further regulate cryptocurrencies to be able to fight illegal activities such as tax evasion.