If you sell Bitcoin for Fiat, then you have to pay taxes.
While Bitcoin is a currency, it is considered a commodity and therefore by selling it you're 'making money'.
It's illegal if you don't pay taxes.
Taxes need to be paid in any case. You in everything are right. It would be desirable to add that it is better to pay, than to hide.
Those taxes that government can justify are bound to be paid but those which are absurd and also not used for the welfare of public, why to pay those taxes. Just because of these taxes, people are highly attracted towards crypto currencies. No one is there to charge them any shitty tax in the crypto kingdom.
I also think the tax must be paid unconditionally. Taxes are the requirements coming from legit power of a country or state. So wtihout tax, we can't prove that our income is legit. Othwerwise, they could have said it's a crime sourced money.
When a country economy works in a fair way I could agree with you, but it's not what happen on many countries. The taxes are expensive, the services quality in return is low and the corruption is high. So why must we be fools to pay excessive taxes? People become poor or they are unable to develop their life's quality for this reason, Bitcoin can help us this way.
I pay what I have to pay, but the extra income from the internet (Crypto-Currency) they don't have the right to charge me.