Will Crypto Ever Be Fully Taxable? Is Any Money Fully Taxable? And, Of Course, Should It Be?

There has been a lot of mainstream news recently regarding the taxation of cryptocurrency, the laws that govern that taxation, and the government actors aiming to ensure taxation of cryptocurrency. That said, another important thing to consider is just how possible/plausible it is that cryptocurrency will ever be as heavily and effectively taxed as more traditional forms of currency, such as the US Dollar. Hard cash has always been notoriously hard to tax as well and that has to do with the ironic fact that the 'paper trail' of hard cash is actually less easily followed than that of electronic records of traditional currency.

With currencies like Monero and ZCash, secure and difficult to trace/untraceable, people are in a position to not pay taxes period. So, it's going to become a mixture of fear, a sense of responsibility, and/or political beliefs that will lead people to pay or not pay unless the Governments of Various Countries figure out a way to get direct access to exchange records, like with the partial data release carried out by Coinbase; now, they protected the really small guys by only releasing records for people over a certain threshold (more than 20,000 USD in transactions in a year between 2013 and 2015) after some intense push back from the US Gov't, which I was glad to see, but it shows that the Gov't can reach pretty damn far to get what it wants. That said, with private, anonymous blockchains, we may see a new era of taxation, as the ability to trace with those may not be possible.

This is ESPECIALLY possible for vendors. While those who go through exchanges have a trail to some degree, if you are a vendor who accepts zcash/monero, then you're in a position where none of those transactions and payments are tracked by anyone except for you. That said, orders on your site still exist as a record and any shipping, etc., so with some detective work it could be shown that you sent items to people. That said, there would be ways around that, or at least the ability to claim that your sales were at a different price, through the use of scattered, randomized shipping dates and a number of sales varying day-by-day. So, the vendor can be empowered to overcome taxation in the scenario of accepting ZCash. It will be just as untraceable as a vendor without a license selling products on the street for hard cash.