This is something people will have to get used to if we want Bitcoin to ever
You really think that if Bitcoin goes mainstream you'll be able to avoid regulations by using a local wallet? If the government gets involved in Bitcoin, and they will if Bitcoin becomes a legal currency, you can be sure that every single coin movement will be tracked. The blockchain makes it impossible for anyone to do anything without being noticed.
It can be tracked but it would be difficulty for them to tie the coins to a single person if a mixer+ bitcoin core is used to prevent sybil attack. It can still be tracked to a person if the end address is to a service which requires ID verification.