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RE: Valuing Steem Rewards As Taxable Income Is A Vast Overstatement Of Tax Liability - Part 1
You are very prescient to note the lottery factor, as they actually discus how Steemit is a lottery in the white paper. There is no guarantee for work done and no pay agreed upon.
The sad truth is that the first half of your post may be what the IRS expects. I hope to show that that is not an acceptable taxation strategy through this series, but the reality is some people may end up audited and effectively double-taxed, just as you point out.
There is no ethical or moral justification for this and stopping it begins at creating an internally consistent logic for taxation that is far less repressive, given that taxes are a reality we are probably all stuck with for now.
Thanks for your thoughts!
I'm 100% with you about finding a fair tax interpretation for Steemians. Specifically considering that most of us are in for the long run and will keep on sitting on our time investments without really getting significant short-term financial benefits.
One other thing we should also consider: it doesn't make sense for the IRS to pay an employee hundreds or thousands dollars of man hours in order to get their hands on about the same or even less amount that it would cost them. Can you imagine the time an agent could spend going through all of one account's transactions on the blockchain for the duration of an entire year? This leave us with the advantage of developping a justified tax strategy that they could be forced to accept. I'm looking forward to see the one you'll be proposing.