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

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

#111

Post by kelnos »

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.

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...

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

#112

Post by TigeriusKirk »

PragmaticPulp wrote: post #21
drcode wrote: post #4

It seems rather unprecedented that there are currently US citizens who are billionaires because of their crypto holdings, without the government having any insight into precisely who these people are. It seems like eventually the government is going to push for more onerous reporting laws to return to the usual equilibrium, where the government has at least some basic idea regarding who owns what (which I think they…

> It seems rather unprecedented that there are currently US citizens who are billionaires because of their crypto holdings, Perhaps, but it’s not as common as it sounds. Maybe there are people out there who invested $33,000 into Bitcoin when it was $1 and then didn’t sell a single penny as it rose and crashed multiple times, but the number of people achieving billionaire status without starting out with tens of milli…

There aren't a huge number of crypto billionaires (though your calculations miss those who rode other crypto waves with their bitcoin profits), but there are a decent number of people in the upper 10-figure lower 11 figure range.

Outside of Satoshi, the number of those people who are anonymous at a governmental level has got to be quite small.

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

#113

Post by adolph »

0134340 wrote: post #102
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.

Why tax anything then? The big guys will always have the resources to hire the best accountants to get the biggest discounts.

Agreed, the fairest form of funding is fee for service and not taxation.

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

#114

Post by dontreact »

jb775 wrote: post #90
Tepix wrote: post #46

Earlier quoted context omitted.

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

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.

It depends on what you do with the revenue. If you distribute the revenue equally to everyone it stops being regressive and is actually progressive.

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

#115

Post by kelnos »

dougSF70 wrote: post #2

Obviously HN community is down on crypto. This exemption is a sign that Bitcoin is getting closer to the mainstream of finance. Like most flanker-moves, Governments should be incorporating it in to their tax policies rather than shunning it. Cannabis is a good proxy, states can keep it illegal and not make tax revenue or they can legalize it, control it and tax it. The feds should do the same. Same for crypto, keepin…

I'm confused about your position on this, though: the amendment in question ensures certain cryptocurrency-related activities won't be taxed.

I agree that we shouldn't be banning this sort of thing, but if people want to throw electricity at it in ways that I consider a huge waste of resources, I'd really like to see that taxed better. And not in a regressive way that makes every electricity user pay more.

> Obviously HN community is down on crypto.

I don't really think that's true, and please remember that the HN community is not homogeneous, and various people have very different (and strong) opinions on many things. I'm personally not a fan of cryptocurrency (I think it's a waste of time and effort, and to top it off it's currently an environmental disaster), but the top comments on this article are relatively positive right now.

I believe @dang has mentioned often that early comments on most articles end up being pretty negative, because the early posts will be more knee-jerk (which tends to bring out the worst reactions in people). Only after people have time to read and cool down will posts be more measured. This article was only posted an hour ago (at the time I'm writing this), so no surprise there's a lot of negativity here.

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

#116

Post by toomuchtodo »

thehappypm wrote: post #110
toomuchtodo wrote: post #63

Earlier quoted context omitted.

https://www.forbes.com/sites/ronshevlin/2019/02/11/venmo-ver... (According to company reports, Zelle processed $35 billion in P2P (person-to-person) payments in Q4 2018 versus $19 billion for Venmo. For the full year, Zelle's total was $122 billion, almost double Venmo's $62 billion.) (2019) https://www.zellepay.com/press-releases/zeller-closes-2020-r... (Zelle® Closes 2020 with Record $307 Billion Sent on 1.2 Billio…

I don't argue that Zelle is successful but it certainly did not kill Venmo. Venmo is alive and well. I think Zelle is more useful for things like tenants paying landlords, while Venmo is more for splitting a restaurant bill, so it doesn't shock me that Zelle is processing a lot more coin.

> while Venmo is more for splitting a restaurant bill

One might assume this feature will be built into banking apps as time goes on and instant payments are ubiquitous. It's already in my Chase iOS app [1]. I argue it's a feature, not a business. I concede we'll have to see what happens when deposit accounts at real banks are given access to instant payment functionality.

[1] https://www.chase.com/digital/customer-service/helpful-tips/...

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

#117

Post by tracedddd »

ghostbrainalpha wrote: post #26
drcode wrote: post #9

Earlier quoted context omitted.

Sure, if you don't use mixers

Side question: How difficult is it to use a mixer? If you have the tech skills to mine bitcoin is it trivial to find and use a mixer, or is it something requiring more specific expertise?

It’s relatively trivial to use a mixer, just like sending any other transaction. The mixer deals with all the complexity. However almost all mixers have been eventually compromised. It’s likely chainalysis and others can easily demix the transactions, so they really shouldn’t be entirely trusted.

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

#118

Post by Groxx »

admax88q wrote: post #95
api wrote: post #87

Earlier quoted context omitted.

The parent is simply pointing out that all consumption taxes are regressive. A CO2 tax by itself is a tax on the poor, especially the rural poor who have longer commutes and are more dependent on automobile travel. A CO2 tax is only fair if it's paired with progressive tax breaks in other areas and/or subsidies for transition to renewable energy. An example would be a progressive subsidy for electric vehicle purchase…

A CO2 tax and rebate is progressive. The poorest people would receive more back in a rebate than they pay. But the biggest CO2 users would pay way more than they receive back.

While I generally like CO2 tax/rebate/cap-and-trade systems: given how inefficient and polluting many low-cost techs are... not sure I can agree with that, particularly on the small scale down to individual people. Individuals have the least agency on decisions like this, since they have next to no purchasing power. Though we are talking about bitcoin, which does raise the technical/money base-level a fair bit.

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

#119

Post by sunshinerag »

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 is nothing in POW that requires CO2 emissions.

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

#120

Post by mikeyouse »

spinax wrote: post #70
toomuchtodo wrote: post #59

Earlier quoted context omitted.

Zelle is owned by a consortium of the largest US banks [1], and does much more volume than Venmo (because its built into the UX of those participating in Zelle's real time payment network [2]). Congress strongly encouraged the Fed to develop FedNow to prevent Zelle from keeping smaller banks out of instant payment infra. FedNow will eventually replace the ACH system. Hot take: banks being banks, they'll crowd out fin…

> 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).
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