In a letter to IRS Commissioner Charles Rettig, US congressional lawmakers David Schweikert, Bill Foster, Tom Emmer, and Darren Soto set out how current policy is holding back progress in the sector. The Representatives explained how taxing staking rewards as income could lead to excessive tax burdens, the lawmakers urged for an alternative approach that supports and encourages innovation. “It is possible the taxation of ‘staking’ rewards as income may overstate taxpayers’ actual gains from participating in this new technology. It could also result in a reporting and compliance nightmare for taxpayers and the Service alike,” the lawmakers explained.
Lawmakers argue staking rewards should be treated like other kinds of taxpayer-created assets.
According to the Representatives, staking rewards can be more effectively taxed when they are sold, with those validating transactions rewarded by creating new tokens. The lawmakers argued that staking rewards should be treated like other kinds of taxpayer-created assets, which attract liability at the point of sale. The letter’s language was drafted with support from the Proof of Stake Alliance (POSA), which is an industry organization established to promote staking. Alison Mangiero, President of TQ Tezos and a member of the Proof of Stake Alliance, welcomed the proposals as a “common-sense solution.”
Representative Tom Emmer believes bitcoin will get stronger post-pandemic.
The US Rep. Tom Emmer, a known crypto advocate, believes the leading cryptocurrency bitcoin’s main advantage over the dollar, the digital dollar, and even Facebook’s Libra is its decentralization. In an interview with Morgan Creek CEO Anthony Pompliano, Tom Emmer argued that all the other alternatives mentioned have someone in control while bitcoin is decentralized. Tom Emmer cited how Know-Your-Customer rules have become very stringent to the point that opening an account requires the bank to see the person’s transactions from another bank.
