Senators Patrick Toomey and Kyrsten Sinema have joined forces to promote a measure that would exclude cryptocurrency transactions up to $50 from capital gains taxes.
Similar provisions have been proposed in two other measures pending in Congress, but there is little sign that they will be enacted soon.
In the U.S. Senate, a new measure proposing to reduce taxes on minor crypto payments has been introduced.
Senators Patrick Toomey (R-Pa) and Kyrsten Sinema (D-Ariz.) submitted a measure to the U.S. Senate on Tuesday that would exclude cryptocurrency transactions of up to $50 from capital gains taxes. As things stand, the Internal Revenue Service sees crypto assets as property and crypto transactions as investments rather than payments, meaning Americans must monitor and pay capital gains taxes whenever they buy or sell bitcoin. This has severely hampered the potential use of the asset class in regular trade, which many opponents and regulators have cited as an argument against cryptocurrencies’ usability as money.
The measure, known as the Virtual Currency Tax Fairness Act, aims to exclude modest crypto transactions from capital gains tax rules. If enacted, the action would apply to transactions valued at less than $50, with a mechanism to alter this threshold in tandem with inflation.
Notably, similar legislation has been proposed in the past, including a bipartisan measure submitted in February by Representatives Suzan DelBene, David Schweikert, Darren Soto, and Tom Emmer that would have placed the barrier benchmark at $200. Senators Kirsten Gillibrand and Cynthia Lummis submitted a comprehensive crypto bill in June that, among other provisions, aimed to reduce taxes on all bitcoin transactions under $200.
While crypto lobbying organisations and the larger community have cheered attempts to exclude modest crypto transactions from capital gains tax rules, the likelihood that any measures will become law before the end of the year is low. The current legislative schedule, which is loaded with matters unrelated to cryptography, concludes before the November midterm elections. In addition, Senator Toomey will not seek re-election, meaning he will not be in the next Congress to campaign for the bill’s probable passage.