The IRS sent out a statement of work requesting help from consultants in an effort to crack down on taxpayer evasion of taxes due on cryptocurrency. Over the past year, the IRS has gotten rather aggressive in its pursuit of those in the crypto-space. A number of letters were sent out warning taxpayers of their tax responsibilities regarding gains on crypto.
Things are being taken to a new level. The latest move is to get software designed to gather cryptocurrency data and reconcile it with taxpayer filings. It appears the IRS is well aware how cryptocurrency works along with how to track it.
Here we see another step in what is going to be part of the new normal.
With the global economy ground to a halt, every layer of the economy is suffering. This ranges from individuals to small businesses to mega-corporations. Another group that is going to find life difficult are governments, a sector that was not on a winning streak before the crisis.
Many national governments are able to approach the situation by printing money. While this will not solve the problem, it will provide liquidity needed as things are collapsing. Countries such as the United States, Great Britain, and Japan all have this capability. However, local governments and nations in the EU cannot do this. They lack their own currencies.
In the United States, we an existing crisis that is rapidly coming to a head. Many states were basically insolvent. They suffer from crushing pension fund obligations while trying to pay for an increasing number of services promised by politicians. Existing law is such that states cannot print money nor can they file bankruptcy. So what are the options?
At the moment, they are screaming for bailouts. While this would not surprise anyone, it is not going to solve the problem. Thus, intense focus on the budget is going to be required.
This will entail both cuts and the raising of revenues. For governments, revenues means taxes, in the differing forms. We are going to see the greatest roll out of tax increases in our lifetimes. As governments are under the gun, they will increase everywhere they can.
Much of the discussion often centers around income taxes. This, of course, is only one tax that individuals pay. There are taxes such as corporate, social security, sales, payroll, and real estate. We then can add in all the taxes that are listed as fees for licensing. In many states, professions such as doctors, contractors, massage therapists, and food distributors need to be licensed.
We can expect all these fees to increase.
It is said that, in wealth creation, pay yourself first. Sadly, government is making it such that it is at the front of the line. Under the threat of guns and thievery, it will continue to take more of the pie to make up for unfunded obligations.
Senate Majority Leader Mitch McConnell recently made statements that he thinks Congress ought to consider letting states file for bankruptcy. This is something that caught many off guard yet should not be surprising. McConnell's home state, Kentucky, is one of the worst when it comes to funding its pension program. The money that is paid in barely covers the existing obligations, let alone putting some money aside for future benefits.
In the private world, this is a ponzi scheme. When it comes to government, it is totally legal.
So while states like Illinois and California get the press, other states were flying under the radar with their impending pension crisis. Of course, if forced to prioritize, payouts to retirees is going to be low on the list to politicians in office. There are other programs which net a much greater political payout.
This all works to reduce disposable income, at a time when the economy cannot afford it. With the consumer making up more than 70% of the economy in the United States, this is a huge blow. We have more than two decades of data from Japan showing the impact of this.
The more of the economy politician can control, the more power they have. They consistently make promises that much be paid by future generations. As these all pile up, we the onus fall more onto the taxpayer. This is often masked when growth rates are significant. However, with the economy going the other way, it looks like the full story is about to be revealed.
No matter. The psychopaths who are in charge do not care. They will simply keep passing the burden along to the populous until there is nothing left to bleed from this. This is how it always works.
This is why it will not be surprising to see some technology companies step in providing many of the services governments are presently handling. As weaker governments fall by the wayside, mega-tech is ready to branch out.
Sadly, it is hard to decide who is a greater threat to humanity.
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If the Infernal Revolting Syndicate was an honest corporation, then it would make clear rules for cryptocurrency. And, of course, it should classify most as money.
But, they are not honest, they are a terrorist organization.
They are out to destroy everything productive and grind the wheels of innovation to a halt.
So, of course they will do the worst thing possible in this crisis. Make the pain even worse.
They want as much blood, sweat and tears to throw on the alter/pyre of the money god.
The states are different story.
The politicians that screwed everyone over are long gone.
And, the latest politicians have all done more screwing and kicking of the can.
Maybe if there was some virus that killed off all the old people...
Unfortunately, all the pensioners may get their full payment as hyperinflation takes hold.
Else, at some point, there will be those who got some pension, and the rest that got screwed.
They are just the henchmen (women) for the true terrorists that are in control.
Doing the bidding as instructed.
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All good points. I feel that this would have happened at some point, Covid put gas on the fire and sped that up. It’s honestly crazy the governments are allowed to run like Ponzi scheme and bleed the individual driver taxes. The system is so broken you almost wanna let it burn, but I understand the impact that would have an individual’s. Corporate greed and politics have ruined this country. Hopefully we will see some impactful changes actually change the status quo.
We are already seeing governments in trouble. Venezuela is in rough shape and the oil crisis is putting the Saudi Royal family in a bind.
In the US, a city like New York is likely headed to bankruptcy court. States like Illinois and Kentucky, where the pension crisis is the worst, will end up giving them the retirees haircuts while increasing the amount existing workers have to pay in.
Those that are efficient, have money, and are able to take on new roles will be what excels and that is why I pointed to the mega tech companies. Watch how the likes of Amazon and Apple start to spread their wings.
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All great points again. They idealist in me hopes the births a new economy that drives people to crypto realizing existing financial markets are so broken.
I think people will not be lured into crypto because they realize the financial markets are broken. I think they end up here because they have little choice.
People will likely do it out of desperation.
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Well either way as an early adopter we should benefit.
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Assuming the inevitable ban on cash will happen rather sooner than later, I start to think more and more that the only peaceful solution might be to create an economy within the economy, using privacy Crypto (Monero for example), trading locally - while leaving the Government completely out of the loop. The more people do that, the less power (tax revenue) the Government gets until it inevitably destroys itself going bankrupt.
But that's just a thought that crossed my mind.
As the only sole wage earner I often joke among friends that, "I've got two kids, a cat, a bank and a Socialist government to support from my salary."