They can only tax you by force and based on the income you declare voluntarily. I run my life as a corporate entity (incorporated person) and I have an ABN (Australian Business Number). Holding anything over 12 months avoids capital gains in most countries and I will be moving my funds into other areas, privacy coins and buying physical assets to offset any liabilities and utilising this unregulated time to maximise my wealth potential. I actually don't participate with my government. We don't have a lawful agreed contract that requires me to do anything. No contract = no jurisdiction. That is just how I see things these days as I am over the games.
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I don't know where you live (Australia by the sounds of it) but in the UK you do have to pay tax. That is often based on what you declare but if you fail to declare accurately you can go to jail. There have been lots of cases in the last few years of very rich people being caught with offshore banks etc (usually exposed by whistleblowers etc).
As soon as the authorities cotton on to crypto they only have to look at the block chain to see amounts etc.
Regarding your point on Capital gains, I'm sure that's not the case in the UK. All capital gains are taxable but I'm not sure of the rate. It could be tapered but I'd have to check.
Yes you could hide it, but I think it's a lot easier to make it legal and not worry about it. My view is it's only when you convert it to fiat this becomes an issue, so work round that.
I aim to get my accountant to look into it in the next few days. I'll let you know what he says!
I am not a big fan of "Authority" so I have my opinions on "Government" too however I will not drown you with my opinion here. Income tax to me is unlawful and is not done with "consent" nor "contract" other than the voluntary contribution you "choose" to make "voluntarily" based on the "fear" of going to jail. The entire premise of it as an ideology and concept is flawed and unjust and is always misused by our illegitimate corporatised "privately owned" governments. I have other viable options and suggested alternatives which I will share later and I have mentioned them in my videos at different times. Capital gains is generally made on any "income" and in regard to stocks and crypto that would be taxed at 40%-50% above your normal income if realised within the first 12 months of investment (based on the your overall income level). Stack and hold stocks/crypto beyond the initial 12 months and this greatly reduces this capital gains tax %. You can also move funds/returns/profit into different assets other than cash/fiat to offset this tax in the short term. That is how the system works as it incentivises further investments and innovative growth. Find an accountant who is what I called awake. Also consider keeping some of your declared income to yourself. In the end, it is really your money, your wealth and your business. No one, including government, has any right to it. Just my perspective.
Thanks for taking the time to write such a detailed response. I agree in part although not with all of what you say, but to me that is what steemit etc is all about, sharing of ideas and concepts and identifying the good and bad in each other's arguements, not just the constant congratulatory messages I often see elsewhere.
Iam pretty sure UK capital gains tax is only paid when you realise the gain, i.e. Sell the item in question. This is usually done for fiat so would be complicated if you sold one crypto for another. I do not intend to sell enough to make this an issue until crypto is work considerably more and so, although this may be an issue, I have a few ideas around this.
Income tax is more complex I think. I think this would cover mining, blogging etc. Anything where you have nothing, give your labour or resources and are paid! If you mined bitcoin or was paid in bitcoin for a job and instantly transferred to fiat, you could be taxed on that, but bitcoin is volatile (we have seen 10% daily swings recently) so is this viable? Especially as you are unlikely to transfer to fiat like that!
Tax is not normally of any interest but I think it's going to have to be in the future, unless many people who previously would not have bothered, want to remain on the right side of the law!
Looking forward to future debates!