Let’s get this straight, right now: DO NOT give your Bitcoin to the state! Not even if US Congressman Matt Gaetz has put forward a bill to permit the payment of federal income taxes with Bitcoin. Just don’t.
Because he did it, but the fact didn’t change, Bitcoin is about the separation of money and state.
The role of taxes
Based on the common views, everyone says the federal income taxes fund vital services such as healthcare, infrastructure, and the military.
Now allowing tax payments in Bitcoin can lead to a rise in the use of cryptocurrencies for everyday transactions, just like in case of fiat currencies.
But if the bill passes, the US government would need to convert Bitcoin to cash to cover its expenses, and experts think this could result in a supply shock and increased selling pressure on Bitcoin.
Innovation
Matt Gaetz seeks to amend the Internal Revenue Code of 1986 to enable federal income taxes to be paid in Bitcoin, as the bill would directs the Treasury to offer a method for taxpayers to pay any tax using Bitcoin.
Gaetz argues that this will support innovation and provide more flexibility to Americans.
South Carolina Representative Nancy Mace backs Gaetz’s bill and connects it to her proposal on property ownership. She suggested using Bitcoin for taxes and mortgages.
„Use your Bitcoin to pay taxes with Rep Matt Gaetz’s bill, and take out a mortgage with our crypto bill.”
Adoption, but what price?
Passing this bill would be a huge step toward cryptocurrency adoption in the US, no doubt, and it would alter the US Treasury code and have direct effects on Bitcoin investors in the country.
But also many thinks the government selling Bitcoin to fund expenses could raise the market volatility.
US taxpayers paid about $1.7 trillion in federal income taxes in 2023. If just 1% paid their taxes in Bitcoin, this would amount to roughly $18 billion in Bitcoin handed over to the government.
Most of the Bitcoin experts think this is way too much Bitcoin giving to the state, and in the social media, they have lot of supporters who are agree with this opinion.
