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Senators move to exempt Bitcoin, crypto miners from proposed U.S. tax rules

marketwatch.com

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Re: Senators move to exempt Bitcoin, crypto miners from proposed U.S. tax rules

#121

Post by arcticfox »

meowkit wrote: post #84
animal_spirits wrote: post #76

> That means that the IRS will not be able to require that miners, stakers and companies that sell hardware or software for storing digital assets report the activities of their customers or crypto users whose transactions they verify. > In a statement, Wyden said that “investors failing to pay tax they owe through cryptocurrency is a real problem,” but that the law as previously written was too broad and would have…

You’re off base. The original definition was putting tax and KYC requirements on people who don’t have, and can’t get, that information. Network nodes facilitate transactions, they don’t broker them. Its like treating an exchanges electricity provider as part of the equity trade. It’s not tax evasion. The law as originally stated would have crippled the industry in the US.

I rarely notice politicians, but Wyden is frequently in the fray on the right side of a lot of issues I hear about. Seems like he got this one right, again.

Re: Senators move to exempt Bitcoin, crypto miners from proposed U.S. tax rules

#122

Post by [deleted] »

mikeyouse wrote: post #120
spinax wrote: post #70

Earlier quoted context omitted.

> FedNow will eventually replace the ACH system Now that's interesting - does that imply that the clearing delays in transfer (say your US Bank to your Brokerage, ~3 days ACH) will disappear and FedNow makes that an "instant" (within 1 day let's say) settled transfer? Very intriguing.

Yep - the goal is to move to ~real time transactions so settlement is instantaneous for most transactions with a much shorter window for settlement for those txs over some threshold (initial working docs said $25k, but it'll likely be larger by the time it rolls out).

[deleted]

Re: Senators move to exempt Bitcoin, crypto miners from proposed U.S. tax rules

#123

Post by jb775 »

gruez wrote: post #99
jb775 wrote: post #90

Earlier quoted context omitted.

If you use your brain to think through the initial 3-4 domino effects of a carbon tax, you'll quickly realize that the end result is the little guy paying the actual tax via inflation while the big guy actually enjoys larger profit totals (maintaining profit margin % on newly inflated prices = more profit). The tricky part is actually using your brain to think it through.

>you'll quickly realize that the end result is the little guy paying the actual tax via inflation while the big guy actually enjoys larger profit totals What's the alternative then? Implement regulations, forcing companies to increase costs => "enjoys larger profit totals "? Tax companies only, forcing them to pass them onto consumers => "enjoys larger profit totals"? Do nothing?

> Do nothing?

Yes. If the currently available options intended to fix a particular problem don't actually fix the problem while at the same time make the offending business more powerful while making the little guy less powerful...then yes, doing nothing is clearly a better option in the short term.

Re: Senators move to exempt Bitcoin, crypto miners from proposed U.S. tax rules

#124

Post by p_l »

sunshinerag wrote: post #119
Tepix wrote: post #46

Earlier quoted context omitted.

I guess we need a proper CO2 tax to encourage better technology than proof of work

There is nothing in POW that requires CO2 emissions.

But the core principle of Proof of Work is wasting energy. If it takes from green sources, that just means those green sources won't be available to push out polluting ones. Combine this with buildup of polluting sources as backups for intermittent ones...

Re: Senators move to exempt Bitcoin, crypto miners from proposed U.S. tax rules

#125

Post by X6S1x6Okd1st »

ComodoHacker wrote: post #56
Tepix wrote: post #46

Earlier quoted context omitted.

I guess we need a proper CO2 tax to encourage better technology than proof of work

This would just increase the cost of electricity and thus the cost of living for everybody, and won't affect crypto miners much.

IMO the ethical thing to do is a re-distributive carbon tax. All the tax revenue should go directly back to the population as income/subsidy.

Re: Senators move to exempt Bitcoin, crypto miners from proposed U.S. tax rules

#126

Post by godelski »

Tepix wrote: post #46
danielvf wrote: post #22

Finally found the text of the amendment: https://www.finance.senate.gov/imo/media/doc/Wyden%20Lummis%... The amendment is short and explicitly notes that that the following categories do not count as brokers: (A) validating distributed ledger transactions (B) selling hardware or software for which the sole function is to permit a person to control private keys which are used for accessing digital assets on a distribu…

I guess we need a proper CO2 tax to encourage better technology than proof of work

There's plenty of PPOS systems that aren't as resource intensive. ETH2 doesn't require POW. Algorand is PPOS and built a contract into the leger to offset carbon emissions for the electric costs, making it carbon neutral or negative.

Re: Senators move to exempt Bitcoin, crypto miners from proposed U.S. tax rules

#127

Post by X6S1x6Okd1st »

kelnos wrote: post #111
ComodoHacker wrote: post #56

Earlier quoted context omitted.

This would just increase the cost of electricity and thus the cost of living for everybody, and won't affect crypto miners much.

In this case, I think you could work around that, as they could implement a high capital gains tax rate for cryptocurrency sales. Then it would only impact people who mine. Obviously it seems they are going in the exact opposite direction on this, though...

Miners typically get their funds as income, not necessarily cap gains.

Re: Senators move to exempt Bitcoin, crypto miners from proposed U.S. tax rules

#128

Post by robot_no_419 »

jnwatson wrote: post #71

What counts here as a digital asset? World of Warcraft coins? Steam collectible cards?

Yes, those are all digital assets. It's a much broader class of assets than just virtual currencies (ie, cryptocurrencies) that includes photos, electronic records, and pretty much everything that's electronically stored and can be owned by a person.

It's also not really a legally defined term, so there are bound to be different definitions and interpretations. I got my definition from https://www.americanbar.org/content/dam/aba/administrative/b...

See also the wiki, which provides a similar definition: https://en.wikipedia.org/wiki/Digital_asset

Re: Senators move to exempt Bitcoin, crypto miners from proposed U.S. tax rules

#129

Post by tablespoon »

nprz wrote: post #25
whateveracct wrote: post #7

Earlier quoted context omitted.

BTC can be tracked better than cash

So why are ransomware hackers never prosecuted?

> So why are ransomware hackers never prosecuted?

Because they're typically based in Russia, and Russia has a policy that it will not prosecute its citizens for computer crimes unless they perpetrated them against Russians or Russian organizations. My understanding is most ransomware has code to detect Russian computers (e.g. by checking localization settings), and will refuse to run if it finds itself on one for that reason.

https://krebsonsecurity.com/2021/05/try-this-one-weird-trick...

Re: Senators move to exempt Bitcoin, crypto miners from proposed U.S. tax rules

#130

Post by politician »

p_l wrote: post #124
sunshinerag wrote: post #119

Earlier quoted context omitted.

There is nothing in POW that requires CO2 emissions.

But the core principle of Proof of Work is wasting energy. If it takes from green sources, that just means those green sources won't be available to push out polluting ones. Combine this with buildup of polluting sources as backups for intermittent ones...

The Sun is wasting energy. Did you know that only like 0.0001% of the energy radiated by the Sun makes it to the Earth?

Proof of Work doesn't waste energy. It uses energy to secure a distributed ledger.

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