Tax revenue denominated in Bitcoin would be funneled into the US strategic BTC reserve and would not trigger a taxable event for the payer.
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A US lawmaker introduced a bill in the House of Representatives on Thursday that would allow Americans to pay their federal taxes in Bitcoin, which would then be funneled into the US strategic Bitcoin reserve.
Under the Bitcoin for America Act by Representative Warren Davidson, a Republican from Ohio, BTC () transferred to the US government for tax payments would not be subject to and not be recorded as a loss or gain for the taxpayer.
In a press release, Davidson :
“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 over time, unlike the US dollar, which has steadily lost value under inflationary pressures.”
The proposal would allow the US government to grow a without having to purchase Bitcoin on the open market, minimizing the positive impact on BTC’s price that active purchases would have.
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Although US President Donald Trump signed an executive order in March, the order did not stipulate recurring BTC buys and required that all future additions to the reserve would be .
The main provision in the executive order was that the US government would not sell any of the BTC it acquired through asset seizure and forfeiture.
The immediately after the order was signed, reflecting the , who expected the strategic reserve to grow through recurring market buys.
Funding the BTC reserve through forfeited assets creates “perverse” incentives for the government to seize BTC to grow the reserve, journalist and Bitcoin advocate Lola Leetz argued.
“Civil asset forfeiture should be reformed, not celebrated. If you are cheering this on, you should be ashamed of yourself,” Leetz .
Matt Hougan, chief investment officer at investment company Bitwise, offered an opposing view, the order was a net positive for BTC.
The strategic reserve “dramatically” lowers the probability of a government BTC ban and encourages nation-state adoption, as other countries follow suit to remain competitive on the global stage, Hougan said.
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