Speaking at the U.S. House Ways and Means Committee on June 4, 2019, U.S. Republican Congressman Ted Budd mentioned two crypto specific bills he hopes would witness unanimous support from the Congress.
Cryptocurrency Tax Fairness Act to Prevent Brain-Drain
Joining noted crypto lobbyist U.S. Securities and Exchange Commission (SEC) Commissioner “Crypto Mom” Hester Peirce is Congressman Ted Budd of North Carolina, who recently testified to the House Ways and Means Committee on the current complicated tax laws that govern the treatment of digital currencies.
As can be inferred from the below video, Budd expressed his concerns over the current crypto tax laws which inflict a substantial tax burden on cryptocurrency investors and traders.
The Congressman termed the current tax laws “flawed” and suggested that cryptocurrencies should have a de minimis tax exemption akin to foreign currencies. Budd plans to achieve this through the Cryptocurrency Tax Fairness Act which he reintroduced on June 4.
Budd explained how the tax treatment of crypto assets by the Internal Revenue Service (IRS) results in crypto traders paying hefty taxes. Per the U.S. Income-Tax Act, the IRS treats cryptocurrencies as property which essentially means that any transaction involving digital assets would be a taxable event, he noted.
Budd highlighted that such treatment is far from rational and could lead to a mass exodus of blockchain and cryptocurrency talent from the country to more crypto-friendly nations like Malta and Singapore.
Virtual Value Tax Fix of 2018
Budd also substantiated on another cryptocurrency related bill titled the Virtual Value Tax Fix of 2018.
The Congressman announced that he would soon present an updated version of the bill which seeks to recognize digital assets as “property” eligible for the like-kind exchange tax deferral. This essentially means that if the bill receives the Congress’ approval, it will allow crypto purchases to be treated the same way by the IRS as any other ordinary purchase.
He added that without such legislation, it would be challenging for crypto adopters to avoid paying hefty taxes on all crypto transactions, be it a sale or purchase.
“An effective sales tax of nearly 40% penalizes the use of digital units of commerce.”
“The use of digital assets is already treated as a sale of the asset, even though the economic reality of the transaction is a purchase of a simple consumer good.”
While the pro-crypto camp in the U.S. continues to grow thick, its rival camp is also upping the ante to put an end to cryptocurrencies.
As reported by BTCManager on May 11, 2019, U.S. Congressman Bradley Sherman asked his fellow party members to join him to prepare a bill to ban all cryptocurrencies.