Why Taxing Bitcoin 'Doesn't Make A Ton Of Sense' According To Bill Miller IV
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Miller Value Partners investment chief Bill Miller IV has questioned the government’s right to tax Bitcoin.
"If you think about why you pay taxes in society, it’s to enforce property rights," the son of legendary investor Bill Miller III told Bitcoin educator Natalie Brunell on a "Coin Stories" podcast episode released last week. "And so the government, when you say buy or sell a house, all that recordation tax, all those taxes go towards keeping track of who owns what."
Miller said taxing Bitcoin did not feel right because the blockchain handled these administrative tasks.
"For them to reach their hand in there, It doesn’t make a ton of sense," he said.
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Miller made these remarks in defense of long-rumored plans of the Trump administration pushing for zero capital gains tax for cryptocurrencies, a move that, if it happened, could put the U.S. on par with cryptocurrency hubs such as Dubai, Singapore and the Bahamas.
"Whether or not that ultimately happens ... it is very cool that there’s still no wash sale rule on Bitcoin," he said.
The wash sale rule prevents investors from claiming tax deductions on artificial losses from securities. It prohibits investors from claiming a loss when they sell a security at a loss and purchase it again within 30 days.
The rule does not apply to cryptocurrencies in the U.S. because the IRS classifies cryptocurrencies as property, not securities. This allows cryptocurrency investors to employ tax loss harvesting strategies to reduce tax burdens.
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U.S. cryptocurrency investors face capital gains taxes of up to 20% in the status quo.
While a zero capital gains policy for cryptocurrencies remains only a rumor in the U.S., there is at least one piece of legislation seeking to lower the tax burdens of cryptocurrency users.
Sen. Cynthia Lummis (R-WY) last week introduced legislation to address several cryptocurrency tax concerns in the U.S. For example, the bill aims to prevent the inclusion of transactions below $300 in tax calculations with an annual cap of $5,000 to allow people to engage in small day-to-day transactions like payments without worrying about capital gains.
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