Home Money OPINION: Should Ohioans pay taxes with Bitcoin?

OPINION: Should Ohioans pay taxes with Bitcoin?

5 min read

Opinion writer Charlotte Caldwell asserts Ohioans aren’t ready to for the option of using Bitcoin to pay their state taxes. 

Ohio recently introduced Bitcoin as payment for taxes, becoming the first U.S. state to accept the currency. While this idea sounds like it was produced with good intentions and was accepted to help Ohio look more tech-friendly, will the use of Bitcoin be more beneficial for businesses in the long run?

First, many may not even know what Bitcoin is and how it works. This could make business owners who want to use Bitcoin to pay their taxes confused, and they could possibly handle it poorly.

The most basic definition of Bitcoin is that it is an independent digital currency, meaning it is not distributed by banks, which enables instant payments to anyone, anywhere in the world. If one organization wants to send some Bitcoin to another, it is broadcasted to the network to make sure there is no fraudulent activity occurring.

Bitcoin seems to be secure and a better option in theory, with perks like no government interference, a network of people who approve transactions, and a difficult counterfeit process. However, there are still many problems with the amount of trust people put into the system that has caused the currency to not become more widespread.

For example, even though Ohio claims that it accepts Bitcoin, taxpayer’s digital currency will go to BitPay, a payments processor, before going to the treasurer’s office in the form of dollars. If business owners do not understand the process of Bitcoin in the first place, the thought of sending their money to another party before the government may be daunting and untrustworthy.

Taxpayers have a right to be nervous about this digital currency, especially after the Bitcoin scams in Canada. These scams involve criminals who pose as tax collectors and convince their victims to convert their cash into Bitcoin so it becomes untraceable.

While this may be a problem for other payment methods as well, Bitcoin transactions are irreversible, so if a business has already been scammed before they will most likely not trust a system that can cause them to be so easily scammed. This would be especially true for small businesses, who might not recover from a scammer.

BitPay also boasts that it only has a 1 percent transaction fee compared to a 2.5 percent fee for Ohio taxpayers when using a credit card, but tax payments can be made for free using a check or electronic transfer, so any taxpayer with a bank account can usually avoid a fee altogether anyway.

Overall, the introduction of Bitcoin into Ohio’s tax system was a good first start, but more information should be given on the process before taxpayers are allowed to use it freely. Other states such as Georgia stalled their proposal for Bitcoin due to a “lack of understanding” about cryptocurrency, so people in Ohio probably have a similar lack of understanding on the topic. On this particular issue, Ohio has definitely jumped the gun on a digital currency that can be made more efficient to the government in time.

Load More Related Articles
Load More By Charlotte Caldwell

Leave a Reply

Your email address will not be published. Required fields are marked *

Check Also

OPINION: All government leaders need a coronavirus course of action

Opinion Editor Charlotte Caldwell, a sophomore studying journalism, argues that our govern…