The US lawmaker discussed crypto tax policy during a Senate committee on the financial hearing on Wednesday. This included the possibility of tax exemption for crypto transactions below certain thresholds and how revenue from staking services should be categorized.
Lawrence Zlatkin, vice president of taxation at Crypto Exchange Coinbase, urged the Senate committee to consider tax exemptions for cryptocurrency transactions under $300 to encourage commercial use of payments and enable innovation within the United States. Zlatkin said:
“The principle of guidance is simple parity with traditional finances. The same tax rules should apply to the same economic activity, including blockchain goods, stocks and tokens. There is no parity at present.
Lawrence Zlatkin addressed the Senate on the Cryptocurrency Tax. sauce: US Senate
Lawmakers also tackled ways to enforce closer reporting requirements for cryptocurrency transactions, minimise tax exemptions, and close the annual tax gap of around $700 billion, potentially classifying revenues from income as taxable income under a layered income tax system.
Tax policies are a major question for businesses that remain uncertain about the impact of cryptocurrency users, industry executives, and activities, and for whether the Internal Revenue Service (IRS) will punish them for their involvement in the digital economy.
Related: US Senate Finance Committee discusses crypto tax issues next week
Elizabeth Warren chimes and claims loose tax requirements help washing machines
“Crypto holders don’t pay at least $50 billion a year in the taxes they owe,” Massachusetts Sen. Elizabeth Warren said at the hearing.
Warren argued that other asset classes would suffer as investors waived those asset classes to take advantage of crypto tax increases by carving out special tax exemptions for cryptocurrencies.
Senator Warren opposes granting special tax exemptions for small crypto transactions. sauce: US Senate
“The Tax Commission estimates that this proposal alone will mark a tax increase of $5.8 billion for crypto investors,” added Warren.
Senator Warren pulled out a link between special tax exemptions and money laundering in crypto, claiming that the exemption would provide cover to avoid US sanctions and surveillance by the Financial Crime Enforcement Network (FINCEN).
She concluded that no special tax exemption should be permitted on digital assets, and that all money created from crypto transactions should be taxed based on an existing policy framework that manages securities and commodity investments.
magazine: One thing all of these six global crypto hubs have in common…
Discover more from Earlybirds Invest
Subscribe to get the latest posts sent to your email.
