Norbert Michel, director for Data Analysis at the highly influential conservative think tank the Heritage Foundation, has called on congress to remove capital gain taxes on cryptocurrencies.
During a congressional subcommittee hearing on “The Future of Money: Digital Currency,” Michel argued crypto innovation should be fostered, not smothered. Michel says, and we quote at length:
“Competitive processes should take place so that consumers and businesses can discover the best means of payment.
The fact that cryptocurrency is a new option for making payments, though it’s in its infant stages, should be embraced.
The federal government should not step in and tilt the playing field. It should treat cryptocurrency, and all other forms of money, neutrally.
That means it should not bestow any particular legal advantage on any particular alternative form of money, and that it should remove all legal barriers to using alternative forms of money.
Removing capital gains taxes from purchases with alternative currencies, including cryptocurrencies and foreign currencies, would be a major step towards leveling that playing field between alternative forms of payment.
To further level the playing field, congress should even consider allowing US postal services and other government agencies to accept these alternatives.
These competitive forces are the forces that push entrepreneurs to innovate and improve products, specifically to satisfy their customers. They also expose weaknesses and inefficiencies in existing products.
These same competitive forces can and should be used to improve money. The federal government’s partial monopoly on money limits the extent to which competitive processes can strengthen money and it exposes our money to the mistakes of a single government entity.
Nothing can provide as powerful a check against the federal debasement of money as the threat of competition from viable alternative forms of payment.”
Michel further strongly came out against the idea of central bank accounts for the public, stating that would give them a complete monopoly over money, calling it a tyrannical act.
He instead recommended competition between fiat money and cryptocurrencies and other alternative forms of payment. Developing on his call to remove capital gains on cryptos in reply to a congressman’s question on what congress can do to remove impediments on cryptocurrencies and blockchain tech, Michel said:
“The main one, honestly I do believe is capital gains tax. The fact you have to keep track of basis in every single transaction you make, that’s a major impediment to using anything other than the US dollar for your transactions.”
The Heritage Foundation is one of, if not the, most influential think tank in the Republican party generally and the Trump administration specifically.
The foundation had a powerful say in the staffing of the administration, with CNN noting during the transition that “no other Washington institution has that kind of footprint in the transition.”
Neither congress nor the current administration had a say on how cryptos are taxed. The decision was instead made by IRS in 2014 during Obama’s presidency, leading to longstanding criticism of double taxation.
This is the first time the matter has publicly been raised in front of congressmen, with Dr. Norbert Michel being the most high profile individual to do so thus far. Whether congress will hear, however, and whether Trump will hear, remains to be seen.