US Congressman: Encrypted currency is related to national security, the government should avoid double taxation

According to Dailyhodl's June 8 report, US Congressman Ted Budd recently elaborated on how tax policy can hinder the adoption of cryptocurrencies and how to kill blockchain innovation and push talent overseas. He called this a "national security issue." On June 4, when issuing testimony to the US House of Representatives fundraising committee, Bard called for the two parties to support the Cryptocurrency Tax Fairness Act and the 2018 Virtual Value Tax (Virtual Value Tax). Fix of 2018). These bills help solve the problem of low adoption rates for Bitcoin and other cryptocurrencies.

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Bud pointed out that the competitive environment in which bitcoin and encryption technology are located is unfair, and cryptocurrencies cannot really compete with fiat currencies because encryption enthusiasts face double taxation problems, and such double taxation does not apply to fiat currencies. Double taxation prevents people from using cryptocurrencies as they would with ordinary currency. If this problem is not solved, it will affect the adoption rate and innovation of the US cryptocurrency. He said:

“First, I want to talk about why virtual currency should have a low waiver. Because you all know that cryptocurrency and blockchain tokens are not eligible for exemption. Under the US tax law, the IRS will be a virtual currency. As property, this means that the sale and exchange of blockchain tokens for currency, other goods and services is a taxable activity. For example, if a generation of currency users spend $0.65 worth of bitcoin to buy soda from vending machines Water, as required by law, must calculate and pay the tax liability associated with the transaction.

In my opinion, this is not a sustainable model. Fortunately, there is legislation in this area to solve this problem. The Cryptographic Tax Equity Act was passed by the previous Congress, by former House of Representatives, current Colorado Governor Jared Polis, member of the committee, and my friend David Schwekot. (David Schweikert) co-sponsored. I am also one of the co-sponsors of this legislation and I am proud of it.

The easiest way to solve this problem is for legislators to extend the low exemption of personal foreign exchange transactions to blockchain token trading. I believe this bill will be proposed by Congress at some point. I urge the committee to consider this bill because it is essential to do so.

Secondly, I would like to talk about one of my own legislation in the last Congress, the virtual value tax amendment in Act 20, HR7361. With the new progress of the Democratic leaders, I hope that this bill will come out as soon as possible. This is another simple bill that will ensure that digital assets are considered property that meets the conditions of a similar transaction or are subject to tax extensions that have historically been permitted under Section 1031.

If we do not meet the same trading conditions, we basically face the following three aspects: First, effective double taxation on blockchain transactions, the economic reality is to buy and sell; secondly, taxpayers are required to bear a higher tax burden; Third, the above effects have a deterrent effect on all blockchain-based activities.

Nearly 40% of the effective sales tax is equivalent to penalizing commercial use of digital currency. Even though the economic reality of digital asset trading is simply to buy simple consumer goods, its use has been seen as an asset sale.

In fact, for knowledgeable consumers and digital asset holders, this tax change will greatly hinder the use of digital currency. For example, consumers who use Bitcoin to buy flat-panel TVs face double taxation, first the sales tax at the time of purchase, and second, the capital gains of the bitcoin used at the time of purchase.

"In the final analysis, this is a national security issue. The most important thing is that we will continue to develop this technology in the United States. I would like to ask the members of the Committee to listen to and consider the two proposals that I have emphasized today. This involves the cooperation between the two parties, but I I know that they will help develop this most important technology since the invention of the Internet."

Bud pointed out that some trade organizations, such as blockchain associations and digital business chambers, are preparing to cooperate with legislators to draft necessary policies and regulations to promote the development of the industry.