Gaetz emphasized the potential benefits of this “bold move” and said the bill will ensure that the US remains at the forefront of technological advancement.
The Congressman said:
“My groundbreaking legislation will modernize our tax system by allowing federal income tax to be paid with Bitcoin. This is a bold step toward a future where digital currencies play a vital role in our financial system.”
Taxes with Bitcoin
The bill proposes that taxpayers be allowed to use Bitcoin for federal tax payments, which Gaetz believes would “promote innovation, increase efficiency, and offer more flexibility to American citizens.”
If enacted, the legislation would direct Treasury Secretary Janet Yellen to develop a plan for accepting Bitcoin as a legitimate form of currency for federal tax payments. Yellen has historically been a critic of Bitcoin and expressed opposition to crypto.
The Congressman pointed to his recent visit to El Salvador, the first country to adopt Bitcoin as legal tender in 2021, as a key influence on his decision to introduce the bill. He said that Bitcoin has helped enhance economic stability and job creation in Central America.
The Congressman’s proposal signifies a significant shift in the approach to integrating digital currencies into the mainstream financial system, reflecting a growing recognition of their potential to reshape economic practices.
Gaetz’s proposal follows similar actions by several US states. Colorado became the first to approve crypto payments for taxes in 2022, while Louisiana recently passed legislation that protects the right to self-custody and mine crypto.
Meanwhile, Texas, Utah, New Jersey, and Kentucky are making strides toward similar policies.
Broader regulation efforts
The introduction of the bill comes amid ongoing debates in Congress over how to regulate the burgeoning crypto industry.
The House recently passed FIT21, a regulatory framework bill that will grant either the Securities and Exchange Commission (SEC) or the Commodity Futures Trading Commission (CFTC) full oversight of crypto trading.
The bill also aims to establish a clear method to classify whether a digital asset should be considered a commodity or security, which is one of the primary hurdles to the industry’s growth in the US.
The bill passed the House floor with strong bipartisan support and is expected to receive similar support in the Senate, which has yet to greenlight the legislation.
