Italy wants to raise capital gain tax on crypto from 26 percent to 42 percent.
When I learnt about it, I rolled my eyes and moved on with my day.
When people in Italy found out about it, they threw tantrums. I understand the tantrums, but it seems to me a lot of people, especially those who make the laws, are still missing the point of crypto and, more importantly, how it works.
Let me put it this way.
Off the top of my head, I can think of at least four ways to avoid paying the 42 percent tax LEGALLY.
By contrast, I can’t think of a single way the government can forcibly collect that tax unless the crypto user keeps that crypto in an exchange.
Crypto isn’t a bank account. They have no access to it.
They don’t seem to get it.
Governments don’t seem to understand that crypto plays by its own rules, and it will eventually always bend regulators around it, not the other way around.
And overtaxing has never worked.
Because what happens when you overtax people? One of two things. Either people have options or they don’t. Either they are wealthy or they are not.
People who have no options, because they don’t have a lot of money, will simply stop doing whatever it was you were taxing them for, because they can’t afford it, and so you won’t get that tax revenue.
By contrast, people who do have enough money to have options will simply go somewhere else.
Either way, the government won’t get that tax revenue.
And Italy, of all places, should know that.
They overtaxed companies. And now small and mid-sized businesses are going bust, while the big ones have relocated elsewhere.
They overtaxed yachts. And yacht owners simply went to France.
They overtaxed cheap cars. And the market has been dying for decades.
They overtaxed luxury cars. And rich people simply registered their cars in their second or third home in Monaco or France or Switzerland.
Overtaxing never works. It especially doesn’t work with crypto
bitcoinea 
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