"Cryptocurrency Regulator" Voices Objection to Imposing Fresh Taxes for Bitcoin Reserves Financing
In an informal chat, crypto enthusiast and Trump's "crypto czar" David Sacks has dismissed the idea of imposing taxes on digital currency transactions to stockpile Bitcoin for the national reserve. Sacks shared his thoughts on the All-In-One podcast, reiterating key points from Trump's executive order on the strategic digital gold reserve.
Sacks stressed that the gold reserve should be funded without relying on taxpayer money, and podcast host Jason Calacanis proposed a 0.01% tax on all crypto transactions as a means to generate "free" Bitcoin for the government. However, Sacks flat-out rejected this idea, highlighting a history where modest initial taxes tend to escalate:
"That's how taxes always start. They describe them as very modest. You know, when the income tax was introduced, it applied to just a thousand Americans, and lawmakers swore it would never affect the middle class."
Sacks made it clear that he's not a fan of new taxes, even if they initially seem insignificant.
While Sacks doesn't back additional levies, he didn't entirely rule out the possibility of them being introduced down the line.
Following the White House's crypto summit on March 7, there was a significant drop in the prices of most top-10 cryptocurrencies, with the total market capitalization dropping by 5% within a day.
Sacks supports a "budget-neutral" approach, where any government purchases of Bitcoin wouldn't rely on new taxes or increased national debt. His stance resonates with the executive order that authorized the creation of a crypto reserve, emphasizing that the reserve would primarily consist of Bitcoin seized in civil or criminal proceedings, not through taxation or new government spending.
A potential U.S. government crypto tax could negatively impact the market, causing selling pressure as traders anticipate increased transaction costs or as part of a broader risk-off reaction. However, Sacks' advocacy for a budget-neutral strategy could allay market concerns, ensuring the crypto reserve grows through seizures or carefully managed purchases, thereby reducing regulatory risk and bolstering market confidence.
Bitcoin's integration in finance and business, particularly in the realm of technology, is a topic of interest for David Sacks, the crypto advisor to former President Trump. Regarding the idea of imposing a tax on crypto transactions to stockpile Bitcoin for the national reserve, Sacks remains adamant that such taxes tend to escalate and hampers financial freedom. Instead, he advocates for a budget-neutral approach to building the crypto reserve.
