[exelius]

This can only be good for Bitcoin. If you can pay taxes on it; it increases its legitimacy.

Bitcoin has never really been currency anyway; it's more of a pseudo-futures contract than anything else. IMO an essential criteria for a currency is that it is backed by an economy and a government with the power to ensure the security of that currency.

[DanBC]

> This can only be good for Bitcoin. If you can pay taxes on it; it increases its legitimacy.

Prostitutes are expected to pay tax on money they earn. Drug dealers are expected to pay tax on money they earn.

Paying tax is nothing to do with legitimacy.

[ThomPete]

Isn't that more a problem with legislation not with the basic principle?

I.e. Drugs and prostitution should not be illegal.

[amalcon]

It's not limited to those things, though. For example, thieves need to pay taxes on the proceeds from selling what they steal.

[easy_rider]

And they can subtract their investments (e.g. handguns, crowbars ) from income tax.

[gamblor956]

You must pay taxes on all income, however earned. However, you are not entitled to deduct all expenses. Expenses related to criminal endeavors cannot be deducted.

IOW...you are taxed on your gross criminal income.

[easy_rider]

I am basing this on remembering one case here in The Netherlands where this supposedly happened, when a bankrobber had to pay a sum of money, but he could put up his pistol as expenses. [1] The Districts Attorney's office was quoted on saying that in certain cases this could be done. Also stating that for example in the cultivation of marijuana, you get taxed for an estimated income amount. You could subtract your expenses n that estimation.

Maybe that's better in the U.S. then..

[1] http://www.nu.nl/algemeen/472183/crimineel-kan-pistool-decla...

[syntheticnature]

Indeed, that's how they got Al Capone in the end: tax evasion (on the proceeds from his criminal activities).

[DanBC]

I genuinely have no idea what you're trying to say.

It doesn't matter what some people think about drugs - The Government spends vast amounts keeping them illegal and criminalising people who produce, distribute, or consume drugs.

Almost all of The Government sees no legitimacy in drugs.

The IRS will see drug money as taxable money.

The fact that tax authorities are happy to accept tax from illegal revenue means absolutely nothing about the legitimacy or otherwise of those activities.