Bitcoin advocates are questioning a newly drafted bipartisan tax bill, arguing the legislation aggressively penalizes miners with prohibitive tax structures.
The draft legislation, known as the PARITY Act, was circulated by US Reps. Max Miller and Steven Horsford. The bill aims to overhaul the Internal Revenue Code to clarify the taxation of digital assets in the United States.
Why Crypto Leaders Against the PARITY Act?
However, the proposal has instead ignited dispute within the broader cryptocurrency industry.
At the center of the controversy is the bill’s divergent treatment of different blockchain consensus mechanisms. The draft intends to classify earnings from cryptocurrency production as gross income, calculated at fair market value upon receipt.
Crucially, the legislation allows participants in proof-of-stake networks, such as Ethereum and Solana, to defer these taxes until the asset is eventually sold.
Bitcoin, conversely, operates on a proof-of-work system that requires substantial upfront capital for specialized hardware and substantial ongoing energy costs. Under the current PARITY Act draft, Bitcoin miners are excluded from this tax deferral.
Conner Brown, managing director of the Bitcoin Policy Institute, stated that the draft retains double taxation on Bitcoin mining while providing targeted relief to staking operations. Brown argued the proposed legislation arbitrarily picks economic winners and losers.
Furthermore, the draft legislation would ease tax treatment for the use of certain GENIUS Act-defined payment stablecoins in everyday payments.
The Bitcoin Policy Institute said the provision would make it harder for consumers to use Bitcoin for small retail purchases. It said those transactions could still trigger capital gains reporting requirements, adding a tax burden to everyday spending.
Industry Experts Highlight Room For Improvements
While Bitcoin purists push back against the exemptions, broader industry lobbying groups are attempting to leverage the draft as a starting point for wider legislative reform.
Cody Carbone, CEO of The Digital Chamber, welcomed the PARITY Act legislation but emphasized the need for significant revisions to prevent the industry from moving overseas.
While expressing excitement that a public discussion draft is finally available, he noted that the current iteration requires major improvements.
Against that backdrop, Carbone outlined several core revisions his organization is demanding. These include taxing both staking and mining rewards only upon sale or disposition, establishing a broader de minimis exemption beyond stablecoins, and shielding basic technical actions, such as moving crypto between personal wallets, from taxation.
He also called for simplified tax forms to avoid duplicative reporting and clearer guidelines for lending and donating digital assets.
The post Bitcoin Advocates Oppose New PARITY Act Over Mining Tax appeared first on BeInCrypto.
Source: https://beincrypto.com/bitcoin-advocates-slam-new-parity-act-legislation/
