Tax evaders stunned by the Panama Papers leak are likely to see bitcoin as a tax haven, according to a California law professor reported. Bitcoin wallets have no physical presence, and they do not require expensive assistance to create and maintain.
Bitcoin is especially attractive to workers in the gig economy who exchange skills for money. So far there is no effective enforcement method for tracking bitcoin. ‘Super Tax Havens’
Omri Marian, a law professor at the University of California Irvine, tnotes that even as governments have started to cooperate on nabbing tax cheats, bitcoin wallets could become “super tax havens.”
Bitcoin offers disenfranchised workers an easy alternative to traditional income reporting required for independent contractors and employees, Marian says. People who engage in secretive activities like completing homework assignments for students or selling drugs illegally are asking for payment in bitcoin. Such individuals use encrypted email networks like Tutanota. No ‘Paper Trail’
A computer programmer who does computer science homework for college students says getting paid in bitcoin is an easy way to optimize one’s wealth. His customers tell him what they need, he delivers the service, and there is no paper trail created. The programmer says he could quit his regular job and do the homework full time.
Bitcoin could also enable wealthy speculators to conduct complex commercial transactions like gold swapping and tax-exempt stock trades involving buying agents serving as “straw men” by using local currencies to facilitate the exchanges.
Trace Mayer, a cryptocurrency advocate, estimated that if only 1% of funds sitting in offshore accounts transferred to bitcoin, its value would increase substantially.
Since the number of bitcoins is capped currently at 21 million, if billions of offshore dollars converted to bitcoin, the value of a single bitcoin could jump from $580 to close to $3 million. Underreporting […]
