A Rigged Tax System Makes the Case for Bitcoin

When Satoshi Nakamoto mined the first Bitcoin block, he encoded into it a reference to a newspaper headline for that day: “Chancellor on Brink of Second Bailout for Banks.” In doing so, he placed an anti-bank, anti-corruption ideology at the foundation of Bitcoin itself.

Two news stories that made the headlines today underscored that message for me once more.

The Supreme Court has just validated an Iowa law that will require the collection of taxes from online sales no matter where the seller is located.

The Supreme Court has also just sent back a judgement requiring taxes be paid on stock options for corporate executives on the theory that stocks are not money.

Placed together, these two ruling clearly show an anti-you-and-me attitude on the part of the court that is in line with the general rich-get-richer attitude of the court and the GOP (and to a lesser extent the Dems) over the last 40 years.

Though some would say that sales taxes are fair as they are applied to all equally, in fact, they hit those with the least money the hardest. And let’s not forget that these taxes are being applied at a time when GOP administrations both local and national are trumpeting their tax-cutting initiatives, rarely pointing out that those initiatives greatly favor the already wealthy over everyone else.

And, the opinion of the court to not reject outright a claim that stock options don’t count for income taxes because they aren’t ‘money’ makes my head hurt. As far as the IRS is concerned, every time I provide benefit I get for services rendered – whether printer, a haircut, or whatever, needs to claimed in cash value and taxed. But of course, I’m not a millionaire with lobbyists in Washington.

The trend is clear and frightening. Institutions are being hardened to make it so the wealthy can make and keep all the money, and everyone else has to give what little they have up.

Satoshi Nakamoto knew this. It’s one of the motivations to create a decentralized, trustless, no-need-for-banks-or-government money. When Bitcoin and the second-layer-network Lightning are fully developed, Bitcoin is set to suck the power away from these institutions.

I don’t know think that Bitcoin will solve all the world’s problems, but I do know that we are not going in the right direction. Bitcoin is powerful enough that it will knock those institutions and oligarchs off course and maybe, just maybe, give us a chance to create a better world.