After realizing that taking out a home loan meant his property would never really be his, a military man sold his house to buy bitcoin.
This is an opinion editorial by Mickey Koss, a West Point graduate with a degree in economics. He spent four years in the infantry before transitioning to the Finance Corps.
In fact, I started this article almost a year ago and had abandoned it, until the idea was reinvigorated via Twitter Spaces with “Toxic Happy Hour.” when listening @publordhodl talk about estate taxes there, the implications suddenly slapped me in the face:
Estate taxes and property taxes mean you never own anything. Ever. Maybe that’s the point.
You no longer have anything, you just don’t know it yet
In 2018, my wife and I decided to take advantage of our VA home loan benefit to purchase a home in our new duty station. The house was in a good part of a low income area, so the price would allow us to rent the house after we left to try to build some wealth and cash flow.
Fast forward two years: we’re in for an outsized black swan event, and I’m not talking about COVID-19. The event I refer to was the eviction moratoriums that were rushed through during that period.
By luck and chance, our tenant stayed in their place and continued to pay their rent, but if they had stopped, it could have spelled financial disaster. The message was clear and the precedent was set: I no longer had rights to my property. We worked diligently to sell the house, eventually selling it through an off-market deal to another investor, and using the proceeds to buy that beautiful, glorious bitcoin price crash in 2021.
He came for the PGU, he stayed for the FGU
Like many in the military and the middle class, owning a home is an essential piece of building long-term wealth for me. Especially for the military, frequent moves make this difficult to do without choosing properties that can be rented out after you move.
However, I see that the risks have increased exponentially after what happened in 2020. I no longer think it is a viable strategy.
Also, even if we were to pay for the properties and own them outright, we would still have to pay taxes each year, and what would stop another rent moratorium from taking effect? Or worse yet, a wealth tax? It really got me thinking: We don’t own anything anymore and we still don’t know it?
It took me a while to understand this, but bitcoin is the only thing I really own. Conversations about wealth taxes and eating the rich have made me re-evaluate this lesson.
It makes me think of Jeff Booth’s earlier thesis, that the system cannot be fixed from within. Bitcoin is attractive at first because of the price increase sensation (PGU), but inevitably you reach a tipping point; Will you panic sell at the first sign of danger, or will you dig deeper through proof of work and discover real value?
Bitcoin’s true value is not reflected in its daily price fluctuations; bitcoin’s value is reflected in its ability to empower the individual. Bitcoin in self-custody is fundamentally freedom enhancement (FGU) technology. The forfeiture-resistant nature allows individuals to exercise jurisdictional arbitrage, fleeing hostile areas without taxes or coercive exit penalties. It levels the playing field for people, a fact that will become more apparent in the years to come.
Freedom can only exist in a state where individual rights are protected, including property rights. What people don’t realize is that policies targeting the wealthy can inevitably be the very things that keep them from joining that group, even though those same policies can change, targeting the people who once supported them.
This is first order thinking, wrought with unintended consequences and unplanned impacts; an insidious envy, based on a scarcity mentality. In a world devoid of monetary scarcity, everything else becomes scarce as a result. Estate taxes solve the problem in the same way revenge does, short-term satisfaction with potentially dire long-term implications.
If you think the last bull market was exciting, wait until nation states start passing wealth taxes. The true value of Bitcoin will be reflected in time. Until then, I’ll stay humble and pile on sats, waiting for the inevitable.
This is a guest post by Mickey Koss. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.
