Hot StoriesUS Lawmakers Want Free Bitcoin Transactions

US Lawmakers Want Free Bitcoin Transactions

One of the main obstacles that are standing between bitcoin reaching global adoption is the US tax code. Right now if you want to buy something using bitcoin you have to pay capital gain tax. US lawmakers want free bitcoin transactions. Think about if you go to dinner and you buy it with us dollars you simply buy the meal you pay your sales tax and you tip the waiter you walk out of the restaurant and all is good. in the world.

If you were to buy that same exact meal in bitcoin you still would pay for the meal, the sales tax, and tip the waiter. But then you’d get hit with capital gains tax that doesn’t make it very attractive for people to use bitcoin as a medium of exchange to buy goods and services in their everyday life. 

But now there are politicians on both sides of the aisle that are coming together and they’re trying to address this problem. We have a brand new bipartisan bill that’s been put forward that would exempt small $50 bitcoin and cryptocurrency transactions from capital gains taxes.

US lawmakers want free bitcoin transactions. According to coin center, they said that this could pave the way for bitcoin to be used for retail payments, subscription services, and microtransactions. Now that sounds really promising but there are more details to it. CNBC reporter explaining exactly what people are proposing with this brand new piece of legislation. This morning a bipartisan pair of senators floating an idea that could make paying with cryptocurrency much more of an everyday thing. This bill is introduced today and the main goal is to enable consumers to buy anything with bitcoin without paying a capital gain tax.

Now, this proposal comes from republican senator pat Toomey and democrat Kirsten cinema. The main goal is to make it easy for everyone so everyone can use it in their daily routine for purchases. Right now if you buy something with bitcoin even just a cup of coffee, you could technically owe the IRS capital gains tax on the crypto that you used.

Senator Toomey said digital currencies have the potential to be used in our daily lives. Congress is discussing the crypto regulations but didn’t come up with proper regulations. So we’ll see how much momentum this new crypto tax bill picks up but guys it’s clear that Congress is watching the industry closely.

Most of you who hear this about free bitcoin transactions they’re gonna say wow that sounds awesome$ 50 or less and I don’t have to pay capital gains tax. I’m not so enthusiastic about this and the reason is it doesn’t pass the dinner test. What’s the dinner test if you have to go to dinner and buy it with bitcoin it’s usually more than 50 bucks. If dinner can’t be purchased with bitcoin without paying capital gains tax then what’s the point of having any sort of de minimis exemption built. 

Ultimately a de minimis exemption is important but $50 is laughable. We need to get it up to five hundred dollars or a thousand dollars. There are so many things in an economy that cost more than fifty dollars. Especially with inflation over nine percent and so ultimately, this is the right idea. But people should question the execution should it not be more than 50 or 500 or more and then they should start getting excited.

Read: An Insane Plan to Recover 8,000 Bitcoin

Ultimately the tax code stands in the way of more global adoption. It prevents people from spending their bitcoin. If we want bitcoin to transition from simply a store of value to a medium of exchange. We’re gonna have to change that tax code it’s gonna be an important step. Kudos to these politicians coming together across the aisle and trying to push this forward but I think we gotta raise that limit in order for it to make sense.

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