If you live in Ohio, you may know the name, Josh Mandel. He is a twerp. He is also the Treasurer for the State of Ohio. According to a piece reported yesterday in the Wall Street Journal, he is setting in motion a plan to let Ohioans pay state taxes in... bitcoin.
OK, quick review. My argument all along is that if you can't pay your taxes in bitcoin, it can't catch on because there are unnecessary transaction costs when people have to convert everything back and forth between dollars and bitcoin. Hence, it is useless. And, no sane government would let anyone pay taxes in a currency it doesn't control. See my comments in the "Bitcoin is bullshit" series on Greece, and the other disasters for countries that don't control their own currency.
What's the deal? Is Josh Mandel just completely blinkered?
Yes, but that's not exactly relevant here. No state controls its own currency anyway. Ohio doesn't have Ohio dollars, and Ohio can't set monetary policy, so Ohio has no vested policy interest in the dollar, per se. Anyone who knows jack shit about economics has an interest in preserving the concept of monetary policy, but Ohio doesn't control the dollar any more than it controls bitcoin, so what's the difference?
In principle, Mandel could fuck over anyone dumb enough to pull this with fees. If he were smarter, he'd use a system that lets him set an exchange rate rather than what he's doing, too, but like I said, Mandel is an idiot.
Remember, though, that there are federal taxes. Every transaction still has transaction costs, even in Ohio. Mandel's move doesn't change that. It's just a stupid stunt for a state to accept an additional currency it doesn't control on top of the primary currency it doesn't control. Show me a nation, which controls its own currency, accepting tax payments in bitcoin, and I'll show you a country run by someone even dumber than Josh Mandel.
Please... nobody explain to Donald what bitcoin is.