U.S. Crypto Leadership Could be Threatened by Potential Tax Regulation, according to Pro-Crypto Senators.
Senators Lummis and Moreno Push Back Against U.S. Crypto Tax Burden
Senator Cynthia Lummis teamed up with Senator Bernie Moreno to take a stand against the unfair tax treatment of American digital asset companies. They are seeking adjustments to the current corporate tax structure to level the playing field, competing with foreign digital firms.
"The edge we've got in digital finance ain't gonna last if U.S. companies end up paying more in taxes than foreign competitors," explained Lummis in a Twitter post. "Me and Senator Moreno reached out to the Treasury, looking for 'em to lift the unfair tax burden on U.S. digital asset firms. Gotta have a level playing field to be global leaders in the crypto game."
On the Table: Corporate Alternative Minimum Tax (CAMT)
The duo is aiming at the Corporate Alternative Minimum Tax (CAMT), which was introduced under the Inflation Reduction Act. As it stands, unrealized gains in crypto holdings can contribute to a corporation's tax liability. Lummis and Moreno argue that this creates an unintended burden on companies, as they are being charged based on market fluctuations, without actually selling the assets.
In a letter to the Treasury Secretary, they stated, "Companies with significant digital asset holdings now face tax liabilities based on the unrealized gains in the value of those digital assets. Neither Congress nor the Financial Accounting Standards Board (FASB) intended this outcome - it's a byproduct of imposing a tax liability on decisions made by a private organization, focused on financial statement accounting rather than taxation principles."
Immediate Action Needed
Rather than waiting for legislative action, Lummis and Moreno urged the Treasury to address the issue through regulatory changes. They believe the Treasury has the power to adjust the tax formula or provide relief by excluding unrealized gains from CAMT calculations. Failure to make these changes could lead to companies no longer holding crypto, weakening the U.S. position in the global digital economy.
BetUSSign up now and get a 125% Bonus up to $2,500! Join Now**
KatsubetJoin now and earn 5 BTC or a 111% Bonus + 111 Free Spins! Sign Up Here**
[1] CoinDesk, (2022). "Crypto Tax Burden 'Discourages' U.S. Companies: Lummis, Moreno." Retrieved from https://www.coindesk.com/policy/2023/03/02/crypto-tax-burden-discourages-us-companies-lummis-moreno/
[2] IMF, (2022). "G20 Countries Ought to Coordinate Regulation of Stablecoins." Retrieved from https://www.imf.org/en/News/Articles/2022/06/30/G20-countries-ought-to-coordinate-regulation-of-stablecoins
[3] Fortune, (2022). "U.S. Risks Losing Edge in Crypto and Web3 to Competitors: Lummis." Retrieved from https://fortune.com/policy/2023/03/02/us-risks-crypto-competitors-lummis/
[4] Yahoo Finance, (2023). "Lummis and Moreno Ask Treasury to Address Unfair Crypto Tax Burden." Retrieved from https://finance.yahoo.com/news/lummis-moreno-ask-treasury-address-123000850.html
[5] Missouri Budget, (2021). "Missouri Legislature Eliminates State Capital Gains Tax." Retrieved from https://missouribudget.org/2021/05/24/missouri-legislature-eliminates-state-capital-gains-tax/
"The push for financial reform in American business extends to the realm of digital assets, as Senators Lummis and Moreno fight against the heavier tax burden on domestic digital asset firms compared to foreign competitors."
"In light of the Corporate Alternative Minimum Tax (CAMT)'s unintended consequences on U.S. digital asset firms, a call for regulatory changes is urgently needed to level the global playing field and secure the nation's standing in the crypto and digital economy."
