Florida Representative Matt Gaetz is proposing an amendment to the Internal Revenue Code of 1986 to allow federal income taxes to be paid in Bitcoin. The bill calls for the Treasury to enable taxpayers to pay any imposed tax using BTC.
Gaetz argues that this move would promote innovation, increase efficiency, and provide more flexibility for American citizens.
An excerpt from the proposed bill reads, “[Treasury to] develop and implement a method to allow for the payment with Bitcoin of any tax imposed on an individual.”
South Carolina Representative Nancy Mace supports the bill, aligning it with her own proposal on property ownership.
“Okay, hear us out: Use your Bitcoin to pay taxes with Rep. Matt Gaetz’s bill, and take out a mortgage with our crypto bill,” Mace wrote.
If passed, this bill would mark a significant step forward in crypto adoption in the US. It would not only bring a substantial change to the current US Treasury code but also have serious implications for Bitcoin investors. The government would need to liquidate these holdings to settle expenses, potentially causing supply shocks.
To put it in perspective, US taxpayers paid approximately $1.7 trillion in federal income tax in 2023. If even 1% of taxpayers chose to pay in Bitcoin, this would translate to around $18 billion in Bitcoin given to the government.
However, introducing Bitcoin payments for taxes would require clear regulatory guidelines and legal frameworks to ensure compliance and prevent misuse. Uncertainty or changes in regulations related to tax payments in Bitcoin could also impact market sentiment and BTC prices.