One of the major hurdles of getting Bitcoin (or any virtual currency) adopted mainstream is that of taxes.
For each and every Bitcoin transaction there is a tax, due to it's classification as an asset as opposed to a currency.
Meaning that if you wanted to use Bitcoin to buy a pack of gum, technically you would have to report the price you acquired that Bitcoin at, the price you sold it at (to purchase the gum), and then the difference would be required to be reported as a capital gain or capital loss depending on the price fluctuation during the time you owned it.
Ouch!
I don't know about you, but that sounds like one giant headache and one that I would want no part of if I am just trying to purchase a measly ol pack of gum.
That is where new legislation comes in that was put forth by congressman Jared Polis.
Jared Polis just recently introduced legislation that would allow US citizens to pay for goods and services in crytpocurrency without reporting it for tax purposes.
The legislation is called: The Cryptocurrency Tax Fairness Act.
Catchy name right?!
It's a bipartisan act that was created along with congressman David Schweikert.
The goal of the act is to give everyone a $600 leeway to use cryptocurrency without needing to report a capital gain or loss on the transaction, which would be the requirement currently due to the classification of cryptocurrencies as an asset currently assigned by the government.
The government needs to catch up with the times!
According to Polis, the government needs new laws to keep up with modern technology.
"To keep up with modern technology, we need to remove outdated restrictions on cryptocurrencies, like Bitcoin and other methods of digital payment."
But what will that solve?
"By cutting the red tape and eliminating onerous reporting requirements, it will allow cryptocurrencies to further benefit consumers and help create good jobs."
Not only would this act help benefit consumers and create jobs, but it would also allow the technology to really expand.
It would unleash innovation on micropayment applications that process hundreds of transactions per minute but are very difficult to square with the current tax laws.
Hopefully the US chooses to go in this direction as opposed to the "banning route" China is currently going.
https://steemit.com/cryptocurrency/@jrcornel/china-bans-ico-s-is-this-good-news-or-bad-news
At the moment it seems like China is mostly a lone duck with their decision, and if other countries don't follow suit, perhaps China will flip their recent decision as well.
Stay informed my friends.
Sources:
https://cointelegraph.com/news/bitcoin-congressman-polis-legislation-abolishes-tax-for-us-crypto-payments-below-600
Image Sources:
http://www.visitmysmokies.com/blog/gatlinburg/events-gatlinburg/6-things-dont-know-tennessee-tax-free-weekend/
http://ashnayousaf.blogspot.com/2014/06/does-modern-technology-makes-our-life_14.html
Follow me: @jrcornel