Crypto Taxation: A Slippery Slope?

😲 David Sacks, the White House’s crypto and AI czar, recently dismissed the idea of a 0.01% tax on cryptocurrency transactions during a discussion on the “All-In Podcast.”

💸 The proposal, introduced by tech investor Jason Calacanis, was to generate government reserves in Bitcoin [BTC] and other digital assets.

💼 Sacks argued that even small tax policies tend to expand over time, eventually impacting more individuals than originally intended.

“That’s always how taxes start!”

📜 Sacks compared the idea to the early days of U.S. income tax, which initially applied only to a small group of high earners before expanding to millions of Americans.

💳 Calacanis proposed a straightforward tax mechanism. In that, every crypto transaction in the U.S. would be taxed at 0.01%, with the fee collected in the native asset being traded.

💸 He argued that it would create a steady stream of digital assets for the government, and strengthen its position in an era of increasing financial digitization.

🚫 Sacks pushed back on this idea, warning that even a seemingly minimal tax could set a dangerous precedent.

A “modest” tax today, a financial burden tomorrow?

📜 The 16th Amendment introduced the federal income tax in 1913, initially targeting only high earners.

📈 By 1918, the top rate surged to 77% on incomes over $1 million due to World War I.

📉 A similar pattern has been observed in the crypto sector.

📊 Initially, crypto taxation focused only on capital gains, but over time, the IRS has expanded its scope to include mining rewards, staking income, airdrops, and even transactions between personal wallets.

Abolish the IRS?

💸 Recent statements from Commerce Secretary Howard Lutnick suggest that former President Donald Trump’s administration is considering a radical shift away from the current tax structure.

💵 Instead of an income tax system, the proposal would rely on tariffs on foreign goods to generate revenue.

💸 Lutnick argued that foreign businesses operating in the U.S. benefit significantly while avoiding American taxes.

💸 He estimated that adopting a system of “reciprocal tariffs”, which is, raising import taxes to match those of other countries, could generate $700 billion annually.

White House says no, but is this the last we’ll hear of it?

💸 The debate surrounding cryptocurrency taxation and broader federal tax reform is closely linked.

💸 While crypto advocates oppose new transaction taxes, they have also criticized the IRS for unclear guidelines and overreach in regulating the sector.

💸 Recent legislative moves, including a bipartisan Senate vote to overturn expanded IRS reporting requirements for crypto transactions, indicate growing resistance to excessive taxation and surveillance.

💸 At the same time, the Trump administration’s tariff-based approach raises questions about how crypto taxation might evolve in a radically different tax ecosystem.

💸 If income taxes are reduced or eliminated, could crypto transactions eventually be taxed as part of a broader revenue strategy?

Read More

• PSP PREDICTION. PSP cryptocurrency
• NYM PREDICTION. NYM cryptocurrency
• IP PREDICTION. IP cryptocurrency
• EUR IDR PREDICTION
• RLC PREDICTION. RLC cryptocurrency
• INJ PREDICTION. INJ cryptocurrency
• XRD PREDICTION. XRD cryptocurrency
• CTK PREDICTION. CTK cryptocurrency
• EUR INR PREDICTION
• COW PREDICTION. COW cryptocurrency

2025-03-09 21:20