Blockchain Association's reply to US's crypto tax inquiryIt’s evident that the era of digital assets isn’t on the horizon; it’s right here, challenging our traditional financial systems and urging our lawmakers to adapt. But as they scurry to understand and legislate this elusive technology, industry players like the Blockchain Association are stepping up with their insights.
They’re not just lobbying; they’re pointing out the disparities, inconsistencies, and ambiguities that could throttle the growth of an industry in its infancy.
Addressing the Disparities Between Crypto and Traditional Assets
The Blockchain Association isn’t one to mince its words. While most are content to sit on the sidelines, this U.S.-based cryptocurrency advocacy group has chosen the path of engagement. Their recent outreach to U.S. Senators Ron Wyden and Mike Crapo wasn’t just an informative missive; it was a clarion call for equality.
Digital assets, according to the Blockchain Association, shouldn’t be the proverbial black sheep. When it comes to taxation, why should there be a distinction between crypto and non-crypto assets?
Their stance is clear: both deserve to be on an even playing field. And it’s not just about establishing a parity; it’s about clarifying the murky waters of crypto taxation, specifically around staking and mining income.
In fact, the Blockchain Association doesn’t stand alone in this fight. Just last month, Coin Center, another crypto advocacy powerhouse, echoed similar sentiments.
Both groups emphasize the need for a de minimis threshold, a measure that would exempt minute gains or losses from crypto transactions from being hounded by tax reporting requirements.
Dangers of Discriminatory Taxation
The Biden administration has been busy, and while its intentions might be rooted in safeguarding American interests, some proposed measures seem counterintuitive. Take the digital asset mining excise tax for instance.
A 30% tax on electricity utilized by crypto miners doesn’t promote innovation; it throttles it. It’s like asking the Wright brothers to pay for the air their prototype planes used. Such propositions, as pointed out by the Blockchain Association, could stymie the evolution of the crypto landscape.
The IRS hasn’t been dormant either. Their July 31 directive is clear: if you earn from staking rewards, it’s taxable as gross income. And while the IRS’s approach towards crypto – treating it as capital gains and losses – isn’t entirely unsound, there’s room for finetuning.
A Need for Forward-Thinking Legislation
Legislation isn’t just about laying down the law; it’s about paving the path for the future. And as the Blockchain Association rightly points out, it’s time to roll up those legislative sleeves and get down to business.
Crafting laws isn’t just a matter of control; it’s a responsibility to nurture and foster growth. Digital assets are here to stay, and it’s high time our lawmakers ensure that America doesn’t just adapt, but thrives in this digital age.
In a world where digital assets are rewriting the rules, it’s imperative that the ones making the rules don’t stifle growth with their ink. The Blockchain Association’s outreach is more than a letter; it’s a testament to the pressing need for equitable, coherent, and well-thought-out crypto legislation.
The ball’s now in the lawmakers’ court. Let’s hope they shoot for the stars, not their feet.
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