Bitcoin Q&A: Taxation and failed societies

[AUDIENCE] Hi, Andreas. Thank you for coming.
Here in Argentina people don’t like to pay taxes. [Laughter] If we are going into a world without cash,
as the use of anonymous cryptocurrencies becomes… mainstream, do you think that governments
will find it hard to earn money through taxes, and control what people earn, buy, and sell? Do you think this is a good thing or a bad thing? [ANDREAS] I think traditional mechanisms of taxation
will encounter difficulty if they refuse to change. There are many mechanisms of taxation
that work; with sales tax, as one example. You can implement cryptocurrencies with various
forms of progressive and regressive taxes. I am not recommending this, I am simply saying
that we will see all those possibilities explored. There is a common argument you hear
especially in countries where taxation is… a problem, like my home country of Greece. When I have talked about cryptocurrencies in Greece,
people say, “But people already don’t pay taxes.” “How will we build the roads?” Well, first of all,
there were roads before taxes. [Laughter] Secondly, as we are saying this, we are
in an auditorium built by private money. [Although, had I delivered this talk] in Greece,
the government may have confiscated it afterwards… and then let it fall into disrepair.
So, [that is often an outcome]. [It should be the case that], if you live in a society where
valuable and desired services are delivered to you, like a social safety net for retirement in your old age,
then people will often want to pay taxes for it. They will pay taxes more voluntarily than they do
in countries where they [receive] nothing in return. It is ironic. You would expect that the countries
with the strictest rules, controls, and bureaucracies, who carefully monitor your bank and pull money out of
every tiny corner, are the ones that collect the most tax; the ones that have the lowest rate of tax evasion. But it is the exact opposite. I sometimes try to explain taxation
in America to my Greek relatives. [They ask], “How does the government know how
much you make?” “Because I tell them every April.” “Why do you tell them?” [Laughter] “Okay, let’s rewind… The only reason you are paying
taxes is because, otherwise, they would figure it out, and you would go to jail? Is that the only reason?”
In some countries, that is the only reason you pay. But what you are really saying is,
you are living in a failed society. The taxes are a symptom of a failed society,
a society in which people don’t believe… that they will get something for their taxes,
or that they will be used for something useful. I am not a huge fan of taxes or big governments either.
But there is something to be said about failed states. There are plenty of [countries] where the tax rate is
really low and people pay taxes very comfortably. When you go outside, the roads are actually amazing. In fact, in the countries where people say, “who will
build the roads,” the immediate [answer should be], “Have you seen the roads [the government built]?
Because I have, and they are full of holes!” This is a matter of whether societies can adapt to
environments where people [won’t] just pay taxes… if they know those taxes will be wasted, or misused to
bomb other people. Quite honestly, I am an American. We create refugees and then say, “No, you can’t come
here.” “Why did you bomb my fucking village then?” [Laughter] [Applause]
“I can go back, but it is not there anymore!” The problems that cryptocurrencies will create for taxes
are symptoms of deeper problems in our society. Today, we accept that multi-national companies
and billionaires get away with not paying taxes. The only time we see that as a problem, is when
the entire middle-class can use the same [tools]. That tells you, the problem isn’t the [cryptocurrencies].

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