 
 
Despite the US government being officially in lockdown, the Senate is continuing deliberations on important matters, especially related to finance and taxation. In a recent hearing by the upper house’s finance Committee, the subject of crypto taxation came under scrutiny. Lawrence Zlatkin, the vice president of tax at a major crypto exchange, Coinbase, was an expert witness at this hearing and voiced support for a complete overhaul of crypto taxation in the country.
Zlatkin was sharing his opinion on the matter as the committee deliberated on tax exemptions for crypto transactions below a certain limit.
“The guiding principle is simple parity with traditional finance. The same tax rules should apply to the same economic activity, whether it involves commodities, stocks, or tokens on a blockchain. Right now, that parity does not exist. The lack of tailored rules has real consequences”, said Zlatkin in his session with the committee.
US Congress Deliberating Crypto Taxation
However, the US Congress is under immense pressure right now as the two sides of the political divide are locked in intense negotiations to help avoid a prolonged federal government shutdown. Achieving a bipartisan consensus seems nearly impossible in a situation like this, given the tax shortfall of nearly $700 billion.
While US President Donald Trump ran on a promise to help balance the federal budget through spending cuts and shrinking the size of the government, the budgetary shortfall remains bigger than ever. The efforts of the Department of Government Efficiency (DOGE) don’t appear to have any substantial effect on the proceedings, so some American legislative members are exploring new areas to increase taxation, one of which is reportedly cryptocurrency.
 
Why Tax Policy Matters?
Tax policy is a significant concern for cryptocurrency users, executives, and companies, as the lack of clear guidance leaves them uncertain about the tax implications of their activities and exposes them to potential penalties from the IRS for participating in the digital economy.
While experts like Zlatkin are proponents of a net-zero tax policy on transactions below $300 and no additional taxation on staking rewards, some senators, especially those from the Democratic Party, are thinking in the opposite direction. Senator Elizabeth Warren of Massachusetts wants cryptocurrency holders to pay an additional $50 billion in taxes. She stated that the new proposal would result in $5 billion in losses for the US government and that giving crypto more tax exemptions would create problems for other asset classes.
It remains to be seen which way the committee tilts eventually. Still, given the tens of millions of crypto users in the country and Trump’s digital currency investments, further tax exemptions could be on the table.
Source: https://zycrypto.com/exempt-crypto-from-taxation-in-the-us-coinbase-executive/
