Now this may seem crazy but bear with me. Personally I don't completely agree with taxation but Governments are using tax avoidance as a reason to why cryptos are dangerous to the economy. But I believe that using crypto will in fact be a better system for measuring people's incomes. Although what I suggest needs a competent government which at the moment is hard to find, it will be perfectly plausible and will completely disregard government's main ammunition against crypto. It would certainly be more efficient than the current system and would cut out the banks entirely.

My Idea

Essentially the government creates a “Income” wallet which an employer or a self employed person has to declare their incomes with. The wallet would accept a varied amount of different cryptocurrency and would automatically calculate your tax, and refund emergency tax in the cryptocurrency of your choosing and one the government accepts.

Employers would pay their employees using this wallet with the tax automatically being taken out. Obviously this system could not be anonymous, but it could be for people looking in on the blockchain, with an address being linked to a person. The person could become anonymous to everyone bar the government which is true at the moment anyway.

This is all theoretical, but a sophisticated blockchain company could make this technology and it may already be out there, so what's stopping a government of a developed country with almost uncapped resources.

And it would stop tax avoidance with everyone having to use this system, they cannot use banks and offshore companies to avoid this. If implemented correctly I believe that it could greatly improve the system. It wouldn't stop people acting illegally because they could not declared their incomes but it would be incredibly difficult for them to hide this.

So what do you think, even if you don't agree with the government is this system better?