writes<\/a> that \u201cbitcoin taxes make no sense,\u201d because every transaction is treated as a taxable event under capital gains rules.<\/p>\nAnthony notes that under existing guidance, bitcoin is treated as property, not currency, meaning users must calculate gains or losses each time they spend BTC (BTC), no matter how small the purchase. \u201cIt\u2019s never been easier to use bitcoin as money,\u201d he said, \u201cyet, at the same time, the tax code puts an incredible burden on law\u2011abiding citizens.\u201d<\/p>\n
Cato targets capital gains \u2018burden\u2019 on BTC payments<\/h1>\n
In his analysis, Anthony describes how something as trivial as buying a cup of coffee with bitcoin every day can snowball into \u201cover 100 pages of tax filings\u201d over time. For each transaction, users must record the date they acquired the BTC, the price paid (cost basis), the date they spent it, and the dollar value at the time of the purchase, then report it all on Form 8949 and Schedule D.<\/p>\n
Beyond sheer paperwork, Anthony argues the structure \u201cdiscourages real\u2011world use\u201d and nudges people to hoard BTC rather than spend it, because capital gains rules are designed to reward long\u2011term holding. In his words, current policy has \u201ceffectively paralyzed Bitcoin\u2019s use as a currency\u201d even as wallet infrastructure and merchant tools make payments technically straightforward.<\/p>\n
The think tank sketches several policy fixes, ranging from eliminating capital gains on cryptocurrency payments entirely to carving out exemptions for day\u2011to\u2011day spending. Anthony points to the long\u2011running Virtual Currency Tax Fairness Act proposal, which would exempt gains under $200 per transaction, but calls that threshold \u201ctoo low\u201d to match typical consumer behavior in a high\u2011inflation environment.<\/p>\n
<\/p>\n
Cato\u2019s intervention lands in the middle of U.S. tax season, as the Internal Revenue Service rolls out expanded crypto reporting rules that will see broker\u2011reported digital asset sales matched against Form 8949 entries and new 1099\u2011DA disclosures. At the same time, lawmakers are still debating de minimis exemptions, with some revised bills shifting relief toward regulated stablecoins, prompting criticism from bitcoin advocates who say Washington is \u201cpicking winners and losers\u201d in the crypto market.<\/p>\n
In previous crypto.news reporting on U.S. crypto tax bills and de minimis proposals, coverage has highlighted similar tensions between encouraging innovation and maintaining oversight, as well as concerns that complex filing rules could push retail users offshore or into non\u2011compliance.<\/p>\n
<\/p><\/div>\n","protected":false},"excerpt":{"rendered":"
A new Cato Institute paper argues that U.S. capital gains rules make \u201cbitcoin taxes make no sense,\u201d burying everyday BTC payments in paperwork and locking the asset into a hoarding…<\/p>\n","protected":false},"author":1,"featured_media":14967,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-26071","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-cryptocurrency"],"_links":{"self":[{"href":"https:\/\/bitunikey.com\/news\/wp-json\/wp\/v2\/posts\/26071","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/bitunikey.com\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/bitunikey.com\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/bitunikey.com\/news\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/bitunikey.com\/news\/wp-json\/wp\/v2\/comments?post=26071"}],"version-history":[{"count":1,"href":"https:\/\/bitunikey.com\/news\/wp-json\/wp\/v2\/posts\/26071\/revisions"}],"predecessor-version":[{"id":26072,"href":"https:\/\/bitunikey.com\/news\/wp-json\/wp\/v2\/posts\/26071\/revisions\/26072"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/bitunikey.com\/news\/wp-json\/wp\/v2\/media\/14967"}],"wp:attachment":[{"href":"https:\/\/bitunikey.com\/news\/wp-json\/wp\/v2\/media?parent=26071"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/bitunikey.com\/news\/wp-json\/wp\/v2\/categories?post=26071"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/bitunikey.com\/news\/wp-json\/wp\/v2\/tags?post=26071"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}