A new bill introduced in the United States House of Representatives would allow American taxpayers to pay all federal taxes in BTC, which would then be used to fund the country’s strategic “crypto” reserve.
The bill was introduced by Representative Warren Davidson (R-Ohio). Dubbed the “Bitcoin for America Act,” it amends the tax code to allow Americans to pay “taxes (and any penalty, addition to tax, or other amount)” with BTC.
Under the proposed provisions, the value of tax payments made in Bitcoin would be fixed to the market value at the time the payment is “deemed made.” Payments are “deemed made” once the BTC has been “irrevocably transferred” to a BTC network address designated by the secretary and has received the level of network confirmations specified by the secretary of the Treasury (hereafter referred to as ‘the Secretary’).
The bill also specifies that any taxes paid with BTC shall go to a Strategic Bitcoin Reserve managed and aggregated by the secretary. As currently drafted, this applies to all tax payments made with BTC; taxpayers do not have the option to opt out of their payments being placed in the Reserve.
Under the provisions of the bill, all BTC deposited in the Reserve will be “held for the long-term benefit of the U.S.” The Reserve cannot be sold or otherwise disposed of at a rate of more than one-twentieth of the total holdings in one year, and not before the expiry of a period of 20 years following its deposit.
The bill contains a significant amount of preamble, setting out the justification for the proposals and casting the initiative as a means for the U.S. to stay competitive in a rapidly developing global digital asset economy.
Reads the proposed bill:
“By authorizing the acceptance of Federal Income Taxes in Bitcoin and the deposit of such funds into the Strategic Bitcoin Reserve, the United States will diversify its national wealth into a non-inflationary asset that serves as a long-term store of value, thereby strengthening the Nation’s financial resilience against currency devaluation, economic instability, and global market volatility.”
The text also highlights that China, Russia “and emerging economies” are actively acquiring BTC to diversify their own reserves and hedge against global financial instability, “such that the United States risks falling behind in this strategic race.”
It also takes a jab at the U.S. dollar, saying that it is “influenced by monetary policies, including quantitative easing and interest rate adjustments, which have historically led to inflation and reduced purchasing power.
“Bitcoin, being free from such interventions, offers a stable alternative for preserving wealth, and the establishment and maintenance of the Strategic Bitcoin Reserve would mitigate risks associated with fiat currency devaluation, ensuring the United States maintains economic strength in an increasingly digital and decentralized global economy.”
Remarkably, it even incorporates the bull case for BTC into its terms: “Bitcoin’s value is expected to appreciate due to its scarcity and growing adoption, such that revenues deposited into the United States Bitcoin Strategic Reserve would increase in real value over time, creating a self-sustaining fiscal mechanism that reduces reliance of debt-based financing, enhances the Nation’s balance sheet, and provides a robust financial foundation for future generations.”
A press release by Representative Davidson introducing the proposal quoted him as saying:
“The Bitcoin for America Act marks an important step toward modernizing our financial systems and embracing the innovation that millions of Americans already use every day.”
“By allowing taxpayers to pay federal taxes in Bitcoin and having the proceeds placed into the Strategic Bitcoin Reserve, the nation will benefit by having a tangible asset that appreciates in value over time—unlike the U.S. dollar, which has steadily lost value under inflationary pressures. This bill will give the American people more choice in paying their taxes as well as give our government a stronger financial foundation. The Bitcoin for America Act will position our country to lead—not follow—as the world navigates the future of sound money and digital innovation.”
Read the full proposed text here.
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Source: https://coingeek.com/new-bill-lets-americans-pay-federal-taxes-using-btc/