Crypto Advocates Push for Major Tax Reform in New Amendment
By: Eva Baxter
Senator Cynthia Lummis has announced her intention to introduce a significant amendment to the "One Big Beautiful Bill" (OBBB), aiming to address longstanding tax issues affecting cryptocurrency users. The proposed changes have sparked excitement amongst crypto advocates who are eager to see an overhaul in the current tax regime concerning digital assets. The amendment seeks to ensure that Americans can use digital assets without the liability of unfair tax implementations.
The core of the proposed amendment addresses two key issues: the double taxation of miners and stakers, and the establishment of de minimis tax exemptions for small transactions. Under the current legislation, cryptocurrency miners and stakers are taxed twice – first on receiving block rewards, which are counted as ordinary income, and again when these rewards are sold, thus accruing capital gains tax. This "unfair" tax treatment, as described by Lummis, hampers America's ambition to be a leader in cryptocurrency technology and financial innovation.
Matthew Pine from the Bitcoin Policy Institute has called for public support, encouraging constituents to reach out to their senators and advocate for a narrowly tailored Bitcoin de minimis tax exemption. This would relieve users from the burdensome task of computing capital gains on every small purchase, which not only discourages compliance but also impedes the everyday adoption of cryptocurrencies. Moreover, Dennis Porter, from the Satoshi Action Fund, advocates for taxing rewards solely upon disposition, likening it to taxation practices on self-generated property such as farm produce.
Backing these efforts, Cody Carbone, CEO of the Digital Chamber lobbying group, has reiterated the urgency of aligning the tax treatment of block and staking rewards with other forms of created property, emphasizing the need for legislation to recognize these rewards upon sale rather than creation. As the lobbying efforts intensify, crypto trade groups and policy advocates hope to leverage this opportunity to incorporate these crucial provisions into the OBBB before it reaches the Senate floor. The potential reforms could lower compliance costs, enhance individual reporting efficiency, and bolster the position of the US as a competitive player in the global digital asset space.
