A handful of lawmakers in the United States Paying to get rid of Crypto taxes on small transactions.
Will crypto taxes become a thing of the past?
Currently, capital gains taxes are required on all crypto transactions that bring profits to their owners. Let’s say you buy $100 worth of bitcoin. You hold it for a while and the $100 eventually becomes $1000. Then sell BTC. You made $900 in profit through this transaction, and you likely owe taxes to the government as a result. There are also taxes applicable when one uses cryptocurrency as a method of payment.
The high taxes that cryptocurrency traders and investors are often forced to contend with eventually got in the way of people using cryptocurrency at the mainstream level. Thus, many members of Congress are now looking to reduce the tax burden that merchants face by removing any taxes on transactions that do not exceed certain levels.
Among the congressional leaders pushing charges against crypto taxes are Christine Sinema – a Democratic senator from Arizona – and Pat Tommy, a Republican representing Pennsylvania. They are keen to make small (under $50) crypto transactions that are tax deductible in the future.
The Internal Revenue Service (IRS) announced cryptocurrencies as the BTC property in 2014, which ultimately subjected them to taxes in the first place. Brian Boring – founder and CEO of the Chamber of Digital Commerce – has always been against this ruling, claiming in a recent interview:
This designation was a major setback for its adoption because taxpayers are required to track gains and losses in the value of the virtual currency each time it is used, which hampers retail adoption.
Discussing his reasons for making micro-transactions tax deductible, Tommy commented:
While digital currencies have the potential to become a regular part of Americans’ daily lives, our current tax law stands in our way. The Virtual Currency Tax Fairness Act will allow Americans to more easily use cryptocurrency as an everyday payment method by taxing small personal transactions such as buying a cup of coffee.
Pave the way to pay easier
Many individuals – like Kristen Smith, CEO of the Blockchain Association – praise Toomey and Sinema’s actions, claiming that their ideals will make Bitcoin and cryptocurrency much easier and more attractive to members of the public. Smith said:
The use of virtual currencies for retail payments continues to increase, which makes Americans’ understanding of their tax obligations critical. By providing an exemption for small daily purchases, the Virtual Currency Tax Fairness Act eases the burden on consumers and allows greater use of virtual currencies for more people.
Jerry Britto of Coin Center also felt that this would pave the way for the future of “retail payments, subscription services, and micro-transactions.”
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