A US lawmaker introduced a bill in the House of Representatives on Thursday that would allow Americans to pay their federal taxes in Bitcoin, which would then be funneled into the US strategic Bitcoin reserve.
Under the Bitcoin for America Act proposed by Representative Warren Davidson, a Republican from Ohio, BTC (BTC) transferred to the US government for tax payments would not be subject to capital gains taxes and not be recorded as a loss or gain for the taxpayer.
In a press release, Davidson said:
The first page of the Bitcoin for America Act. Source: Warren DavidsonThe proposal would allow the US government to grow a strategic BTC reserve without having to purchase Bitcoin on the open market, minimizing the positive impact on BTC’s price that active purchases would have.
A projection of the US government’s tax revenue if 1% of taxes are collected in BTC over 20 years. Source: Bitcoin Policy InstituteRelated: New Hampshire approves first-of-its-kind $100M Bitcoin-backed municipal bond
US strategic Bitcoin reserve not what Bitcoiners expected
Although US President Donald Trump signed an executive order establishing a strategic BTC reserve in March, the order did not stipulate recurring BTC buys and required that all future additions to the reserve would be financed through budget-neutral strategies.
The main provision in the executive order was that the US government would not sell any of the BTC it acquired through asset seizure and forfeiture.
The price of BTC fell by 6% immediately after the order was signed, reflecting the disappointment among Bitcoiners, who expected the strategic reserve to grow through recurring market buys.
Funding the BTC reserve through forfeited assets creates “perverse” incentives for the government to seize BTC to grow the reserve, journalist and Bitcoin advocate Lola Leetz argued.
The US government’s crypto holdings at the time of this writing. Source: Arkham Intelligence“Civil asset forfeiture should be reformed, not celebrated. If you are cheering this on, you should be ashamed of yourself,” Leetz said.
Matt Hougan, chief investment officer at investment company Bitwise, offered an opposing view, saying the order was a net positive for BTC.
The strategic reserve “dramatically” lowers the probability of a government BTC ban and encourages nation-state adoption, as other countries follow suit to remain competitive on the global stage, Hougan said.
Magazine: US risks being ‘front run’ on Bitcoin reserve by other nations: Samson Mow
Source: https://cointelegraph.com/news/us-lawmaker-bill-federal-taxes-pay-bitcoin?utm_source=rss_feed&utm_medium=feed&utm_campaign=rss_partner_inbound
