The Bitcoin supporters are questioning the new tax bill, which stipulates that this law punishes miners severely through a burdensome tax structure.
This bill, known as the PARITY Act, was introduced by U.S. Representatives Max Miller and Steven Horsford, aimed at improving the domestic tax code to clarify the taxation of digital assets in the United States.
The reasons why crypto leaders disagree with the PARITY Act.
However, this proposal has become the starting point for debate within the overall cryptocurrency industry.
The crux of the controversy lies in the differing treatment between the consensus mechanisms of various types of blockchains. This bill intends to classify income derived from cryptocurrency production as gross income, calculated based on fair market value at the time received.
Importantly, this bill allows participants in proof-of-stake networks, such as Ethereum and Solana, to defer this tax payment until they sell the asset in the future.
In contrast, Bitcoin operates on a proof-of-work system that requires substantial upfront investment for specialized hardware and ongoing energy costs. Under the current PARITY Act draft, Bitcoin miners are disqualified from deferring this tax payment.
Conner Brown, managing director of the Bitcoin Policy Institute, stated that this draft continues to maintain double taxation on Bitcoin mining while providing benefits only to staking. Brown argued that this bill discriminates without justification against economic beneficiaries.
[This bill] creates a two-tier tax system by granting the right to defer tax payments to stakers while miners continue to face the same phantom income issues. Both parties agree that this should be addressed, as clarified by the Bitcoin Policy Institute.
Additionally, this bill would provide tax relief for using stablecoins as defined by the GENIUS Act for everyday payments.
The Bitcoin Policy Institute stated that this provision would make it more difficult for consumers to use Bitcoin for low-value retail purchases, as those transactions might still require reporting capital gains, leading to an additional tax burden on everyday spending.
[The bill] establishes a de minimis exemption of USD 200 for payment stablecoins but does not cover bitcoin, which has a market value representing 60% of all digital assets. This means that those who buy coffee using bitcoin still need to calculate gains from price differences. A de minimis exemption for everyday bitcoin transactions is necessary for this digital asset to grow into a global medium of exchange. Therefore, any bill that aims to seriously promote equity must include this exemption, the think tank noted.
Industry experts point out that there are opportunities for improvement.
While Bitcoin purists disagree with such exemptions, larger industry lobbying organizations have chosen to use this bill as a starting point for more comprehensive legal reform.
Cody Carbone, CEO of The Digital Chamber, welcomed the PARITY Act draft and emphasized the need for significant improvements to the legislation to prevent the industry from relocating outside the United States.
We are pleased to see the bipartisan draft of the digital asset tax discussion. We have always valued tax clarity in this congressional agenda, so we are very happy that this draft has been made public, allowing us to begin proposing recommendations with transparency, he said.
Although he is pleased that the draft discussion has finally been made public, he pointed out that the current draft still requires significant improvements.
From these facts, Carbone summarized the key demands that his organization wants, including taxing staking and mining rewards only when sold or transferred, creating a more comprehensive de minimis exemption beyond just stablecoins, and protecting fundamental technical actions, such as moving crypto between personal wallets, from taxation.
He also called for a simpler tax form to avoid redundant reporting and requested clear guidelines on lending and donating digital assets.