“Isn’t that the thing used to buy drugs?” US bitcoin tax bill flops

Posted: 5 April 2018 12:55 pm
Bitcoin rich list - FI

Senator Mike Williams says more education is needed before cryptocurrency can be used to pay taxes.

Senators in the US state of Georgia earned praise from bitcoin devotees when they put forward a bill that would let residents pay their taxes in bitcoin and other cryptocurrencies. Similar bills were also presented in Arizona and elsewhere, CoinDesk reports.

But in the state of Georgia, the bill is still up in the air. The Georgia senate adjourned for its recess on 29 March before the bill was heard. Mike Williams, one of the bill's sponsors, says it will need to be reintroduced next year.

Williams attributed the stalling to a lack of understanding.

"There was a lack of understanding on what cryptocurrency is, and when I was talking to senators there was that old-school 'isn't that what was used to buy drugs?' " he told CoinDesk.

Passing the bill, he said, would require more cryptocurrency education for lawmakers. "The more we can talk to legislators and the general public, the more we can educate on the beneficial aspects of blockchain."

On the federal level, he took the opportunity to praise regulators for their cautious approach, specifically around ICOs.

"We do need regulation in the space but we don't need too much. We don't want the regulators to come in and clamp down on the innovation, but at the same time we do need to protect the public from the bad apples," Williams said. "From what I've seen so far, I think they're taking a very cautious approach. I think they're doing well."

The idea of paying taxes with bitcoin may still seem outlandish, especially with classic tax scams now getting a bitcoin twist. In these, scammers contact people pretending to be from the tax office and convince them to pay non-existent tax debts with bitcoin, gift cards or other hard-to-trace stores of value.

It seems bitcoin still has a long way to go before it can shed its criminal past. For now, the idea of legitimately paying taxes with bitcoin might be just as outrageous as the tax office suddenly accepting Amazon gift cards in lieu of dollars.

Tax offices around the world have their hands full working out how to best tax profits from cryptocurrency trades and actually being able to pay those taxes in cryptocurrency might simplify things in some ways, while complicating them in many more.

Disclosure: At the time of writing, the author holds ETH, IOTA, ICX, VEN, XLM, BTC and NANO.

Disclaimer: This information should not be interpreted as an endorsement of cryptocurrency or any specific provider, service or offering. It is not a recommendation to trade. Cryptocurrencies are speculative, complex and involve significant risks – they are highly volatile and sensitive to secondary activity. Performance is unpredictable and past performance is no guarantee of future performance. Consider your own circumstances, and obtain your own advice, before relying on this information. You should also verify the nature of any product or service (including its legal status and relevant regulatory requirements) and consult the relevant Regulators' websites before making any decision. Finder, or the author, may have holdings in the cryptocurrencies discussed.

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