Republican Congressman Matt Gaetz has put forward a bill that would enable American citizens to pay their federal income taxes using Bitcoin. This move is intended to encourage innovation and improve efficiency within the U.S. financial system. Gaetz’s proposed legislation seeks to amend the Internal Revenue Code of 1986, with the bill directing the Treasury Secretary to establish a framework for accepting Bitcoin as a valid form of payment for federal taxes. The aim is to provide greater flexibility for taxpayers and ensure that the United States remains at the forefront of technological advancement.
The bill outlines the need for the Treasury to establish regulations for accepting Bitcoin payments, including the immediate conversion of Bitcoin amounts received into their dollar equivalent after transactions. This process aims to resolve tax-related matters without the involvement of financial intermediaries.
Gaetz’s inspiration for this proposal comes from his recent visit to El Salvador, where he attended President Nayib Bukele’s second inauguration. El Salvador is known for being the first country to adopt Bitcoin as a legal tender. Gaetz believes that the U.S. can learn from El Salvador’s approach to integrating digital currencies into the national financial system.
The Congressman, who is known for his alignment with former President Donald Trump, has voiced support for Trump’s stance on cryptocurrency. Trump has criticized President Joe Biden’s policies on crypto, pledging to support the growth and development of digital currencies in the United States.
Several U.S. states, including New Jersey, Kentucky, and Colorado, have begun to implement their own crypto tax regulations, allowing for cryptocurrency payments for state taxes. Gaetz’s bill aims to modernize the federal tax system by officially recognizing Bitcoin as a payment method for federal income taxes.
If enacted, Gaetz’s legislation would mark a significant step in integrating cryptocurrencies into the mainstream financial system. By providing taxpayers with an alternative method of payment, the bill could increase the broader adoption of digital currencies.
This legislative move is expected to draw significant attention from industry stakeholders and the general public, particularly regarding its impact on the evolving regulatory landscape surrounding cryptocurrencies.
In the current Bitcoin market, the cryptocurrency is trading at $61,551, having rebounded from a dip to $58,400 earlier in the week. The market’s response to Gaetz’s bill and its potential implications for Bitcoin’s value and adoption will be closely monitored in the coming months.
This news comes as The House recently approved FIT21, a regulatory framework bill assigning full oversight of crypto trading to either the Securities and Exchange Commission (SEC) or the Commodity Futures Trading Commission (CFTC). This bill aims to create a clear classification method to determine if a digital asset is a commodity or security, addressing one of the main obstacles to the industry’s growth in the US.