News
Tax payments in Bitcoin proposed in new bill by Congressman Matt Gaetz
- Congressman Matt Gaetz is introducing a bill to allow federal income tax payments using Bitcoin, in an effort to promote innovation and efficiency.
- The bill directs the Treasury to establish a framework for accepting Bitcoin and converting it into dollars immediately after transactions.
Republican Congressman Matt Gaetz is introducing a bill that would allow American citizens to pay the federal contribution income taxes using Bitcoin. This legislative move is aimed at fostering innovation and improving efficiency within the U.S. financial system. Gaetz’s bill seeks to amend the Internal Revenue Code of 1986. The bill directs the Secretary of the Treasury to establish a framework for accepting Bitcoin as a valid form of payment for federal taxes. Gaetz argues that this change will provide greater flexibility for taxpayers and ensure that the United States remains at the forefront of technological advancement.
The bill highlights the need for the Treasury to create regulations to accept Bitcoin payments. Such regulations would include the immediate conversion of Bitcoin amounts received into their dollar equivalent after transactions. This process aims to resolve tax issues without the involvement of financial intermediaries.
Inspiration from El Salvador
Gaetz’s proposal follows his recent visit to El Salvador, where he attended President Nayib Bukele’s second inauguration. El Salvador is known for being the first country to adopt Bitcoin as legal tender. Gaetz believes the United States can learn from El Salvador’s approach to integrating digital currencies into the national financial system.
The congressman, known for his alignment with former President Donald Trump, expressed support for Trump’s stance on cryptocurrency. Trump has criticized President Joe Biden’s policies on cryptocurrencies, pledging to support the growth and development of digital currencies in the United States.
Several US states, including New Jersey, Kentucky, and Colorado, have begun implementing their own cryptocurrency tax regulations, allowing cryptocurrency payments for state taxes. Gaetz’s bill aims to modernize the federal tax system by officially recognizing Bitcoin as a payment method for federal income taxes.
The Internal Revenue Service (IRS) currently mandates reporting of digital asset transactions and taxes on cryptocurrency-related income or gains. Gaetz’s bill would extend this, allowing taxpayers to meet their federal tax obligations directly with Bitcoin.
If implemented, Gaetz’s legislation would mark a significant step in integrating cryptocurrencies into the mainstream financial system. By providing taxpayers with an alternative payment method, the bill could increase costs wider adoption of digital currencies. This legislative move is expected to attract a lot of attention from industry stakeholders and the general public, particularly regarding its impact on the evolving regulatory landscape surrounding cryptocurrencies.
Current state of the Bitcoin market
At the time of writing, Bitcoin is trading at $61,551, having rebounded from a drop to $58,400 earlier in the week. The cryptocurrency has gained more than 2% in the last 24 hours. THE the market response Gaetz’s bill and its potential implications for the value and adoption of Bitcoin will be closely monitored in the coming months.
This news comes after the House recently passed FIT21, a regulatory framework bill that assigns complete oversight of cryptocurrency trading to the Securities and Exchange Commission (SEC) or the Commodity Futures Trading Commission (CFTC). This bill seeks to create a clear classification method for determining whether a digital asset is a commodity or a security, addressing one of the major barriers to the industry’s growth in the United States.
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