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Biden's Stance on Cryptocurrency Taxes Undercuts His Commitment to the Environment

2023-03-28 14:21:40

We don't tax houses while they are being built, therefore we shouldn't tax staked bitcoin either.


Staked bitcoin gains shouldn't be considered a taxable event. Taxing such earnings when they are converted into money with legal tender only makes sense. Anything less would be a betrayal of President Joe Biden's administration's most important environmental program.

Staking gains appear to be treated as immediate income by the Federal Revenue Service. The penalty for running afoul of the IRS can be severe. Also, it is terrible policy and bad politics to tax or threatens to tax staking profits.

There are numerous very good arguments against treating stake gains as taxable events in and of themselves. The IRS should once again follow White House environmental policies in order to combat climate change, according to the best argument.

The moment has come for Congress to clarify the law and forbid the taxation of unrealized profits if the IRS refuses to operationally abide by the Biden administration's publicly stated headline policy.

Gains that are delayed until sale just delay the Treasury's receipt of taxes. The government doesn't spend even a single little Satoshi on it. What's happening, then?

There are several valid ways that cryptocurrencies are taxed. When you trade your cryptocurrency for another type or sell it, taxes will be due. Taxing investment profits runs counter to a well-known White House policy. Moreover, it runs counter to recognized ideas of sound tax policy.

Jasper Johns creates a multimillion dollar piece of art from a blank canvas without paying taxes to Uncle Sam. When he consigns it to a gallery for sale at a certain price, he is not subject to taxes. When he receives the $1,000,000 payment for his most recent work of art, he is taxed.

This makes perfect sense. Uncle Sam won't accept a painting's fragment (or even a tiny fraction of an interest in it) as payment for taxes. How would an artist be expected to cover the tax on a piece that is just offered for sale or in progress? It would be absurd to charge for the development of an artwork!

A building contractor is not subject to Uncle Sam's taxes while constructing a house or even after he gives it over to a realtor for sale. Taxes are taken from sales by the IRS.

It makes no sense to tax staking profits while they are being made, and it is contradictory with how other produced assets are handled. On this, the IRS has established a true Alice in Wonderland policy. And taxing such profits causes actual harm to Americans and America by pushing productive employment and wealth development elsewhere (contrary to declared presidential policy)

Yet, President Biden has made decreasing CO2 emissions a trademark administration goal, which may be the most compelling argument for the IRS to cease taxing staking profits — and, if it does not, for Congress immediately to correct this.

Two of the administration's major priorities—onshoring excellent jobs and combating climate change—are seriously undermined by the IRS's decision to tax investment gains at the time of occurrence. It seems likely that Democrats on Capitol Hill will support the party leader's call to prohibit taxing earnings on bets. Also, there are undoubtedly enough educated Republican lawmakers in Congress to enact legislation prohibiting the taxation on stake profits.

Disclaimer: FameEX makes no representations on the accuracy or suitability of any official statements made by the exchange regarding the data in this area or any related financial advice.

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