Paper stashes can't be put in DarkJPEG and uploaded on Facebook or Dropbox.
I'm not arguing that it's always possible to find stuff out. I'm saying the bar is being raised much higher. Today cops don't go to thousands of people to make a "haircut" on their bank deposits. It's done with a single button click and negotiation with a couple of bankers. With bitcoin you'd have to send around policemen to every house to confiscate stuff. When there's no good justification, people will strongly oppose that.
The reality is that if you want to hide from govt and govt wants to find you, then Bitcoin does not help you much (although it's certainly more mobile than cash). But if thousands of people are hiding from govt routinely, it's much more expensive for govt to go after all of them at once. See what happens with Bittorrent. Some people get caught or threatened, while thousands of others enjoy cheap movies.
Regarding last example: you underestimate the power of good mixing. You can swap coins anonymously so that all the "tainted" coins get distributed to thousands of different hands and never go back to you anymore, while you receive thousands of little coins back, from various sources, not tainted by whatever business you was doing before.
I'm not saying hiding BTC is easy now or will ever be cheap and simple, but it's certainly possible to automate and optimise security measures a lot and there will be a lot of apps doing exactly that. Right now the cost of taxation, inflation and bailing-in is very-very low and hurts most innocent law-abiding citizens (not everyone loves how the taxes are spent, but they are easy to extract anyway). With Bitcoin, huge chunk of money can safely sit in private wallets instead of bank accounts, thus making fractional reserve banking less relevant, bail-in becomes irrelevant too. Those who wish to not declare some income have much safer way to receive/send money, than with modern banking system. Most outstanding tax-evaders will be chased and caught, but 99% may safely enjoy their own little share of global black market without worries. They already enjoy local black market when they pay in cash for lots of things, but it'll expand with Bitcoin to the whole world.
I'm not arguing that it's always possible to find stuff out. I'm saying the bar is being raised much higher. Today cops don't go to thousands of people to make a "haircut" on their bank deposits. It's done with a single button click and negotiation with a couple of bankers. With bitcoin you'd have to send around policemen to every house to confiscate stuff. When there's no good justification, people will strongly oppose that.
The reality is that if you want to hide from govt and govt wants to find you, then Bitcoin does not help you much (although it's certainly more mobile than cash). But if thousands of people are hiding from govt routinely, it's much more expensive for govt to go after all of them at once. See what happens with Bittorrent. Some people get caught or threatened, while thousands of others enjoy cheap movies.
Regarding last example: you underestimate the power of good mixing. You can swap coins anonymously so that all the "tainted" coins get distributed to thousands of different hands and never go back to you anymore, while you receive thousands of little coins back, from various sources, not tainted by whatever business you was doing before.