Bitcoin is making the youth of the world realise how insane the western tax regime is.

If you want to spend your bitcoin you cant just spend it, that purchase will create a taxable event. This means if you do something as innocuous as buy a $5 coffee with bitcoin you need to record the date, time, transaction ID, recipients public address, what the transaction was for, the price of bitcoin at the time, the value of the transaction in dollars, the dollar price you purchased the bitcoin used in the transaction, and then calculate any gain for tax purposes, and you need to do this for every single transaction. You then need to keep these records for up to six years incase you are audited.

Thats quite a ridiculous ask just for using bitcoin for its intended use as money. After all when you travel to another country and use their foreign currency you dont have to do this even though there is a fluctuating exchange rate.

Then there are income taxes on income derived from bitcoin.

Say you earn your income in bitcoin or you operate channels for the lightning network and your entire income is generated from lightning fees (or staking). The bitcoin you earn is considered taxable at the moment you obtain it at the dollar value on the day you obtain it. So if you earn an income from lightning fees which is taxed at a rate of 40% but then the price of bitcoin drops by 60% that means the bitcoin you earned as income is now worth the same as all of the taxes you owe. If bitcoin drops by 80% that means the bitcoin you earned is now worth half of all the taxes you owe making your effective tax rate 200%. And we all know bitcoin can easily drop by 60% or 80% which means this scenario is not just possible it is probable.

The tax authorities could say just mark the cost basis of that bitcoin income to zero and pay tax on it when you sell trade or exchange it, and they would end up with exactly the same amount of tax revenue over time, but instead they want to risk destroying your life financially just to tax that bitcoin as income as it is earned.

In both of the examples above it is clear the tax authorites do not care how much of a record keeping burden they place on you or whether their tax methods risk destroying you financially, all they want is to get the most tax revenue possible from you. They also dont care how much they suffocate the use of new technologies in their quest to tax you. Does this sound like a tax regime the youth of the world want to live under?

Under the traditional financial system these methods were all manageable enough, but in the bitcoin ecosystem it becomes completely unmanageable due to the volatility of the underlying asset, the frequency of income payments from lightning fees and the frequency of tax events created from using bitcoin as a currency.

This is showing the youth of this world that have embraced bitcoin (and that will embrace bitcoin in the future) that western tax regimes are completely unjust and that they dont care about their citizens overall wellbeing, all they want is to get as much of your money as possible even if that means imposing impossible record keeping requirements, potentially destroying you financially, and suffocating the use of new technologies.

These aspects also make it clear that if you want to live off of bitcoin you have absolutely no choice but to move to a country that does not tax bitcoin this way. Moving to a country that doesnt tax bitcoin isnt a luxury it is a necessity to survive.

All western governments would have to do is make bitcoins use as a currency expempt from taxation and make it so income earned in bitcoin is simply marked to a zero cost basis instead of taxed as it is earned. But they wont do that, so the youth of the west has no choice but to leave.

Western governments are taxing their citizens like it is still 1824 not 2024, and this mistake is going to drive the biggest brain drain in history as the youth of the west realise their only option is to leave the west and move to jurisdictions with a bitcoin friendly tax regime or risk being destroyed financially.

This makes me so bearish on western countries and so bullish on places like El Salvador and the UAE because those countries are going to benefit tremendously from this trend over the coming 20 years.

The west is going to force their youth and the future of their countries overseas simply because they refuse to update their taxation methods and move into the 21st century.