Zac Townsend explained that, at its core, the unrealized capital gains tax that the current administration of Joe Biden and Kamala Harris is lobbying for would require individuals to pay taxes on gains in the value of their cryptocurrency holdings, even in the event that they have not made a single sale.
“The plan would have devastating consequences for crypto investors and the economy as a whole, and would undermine the intrinsic value of cryptocurrencies as a store of value that operates outside the clutches of any government,” Townsend said.
He noted that the introduction of a 25% tax would lead to massive sales and lower prices of cryptocurrencies, and would also affect the returns of ordinary investors who invested small amounts in the hope of improving their economic situation.
“Successful Bitcoin investors will face tax bills in the hundreds of millions of dollars simply because they realized the value of the flagship cryptocurrency before anyone else,” Townsend said.
He gave an example that if the new tax amendment is adopted, one of the successful Bitcoin investors, Tim Draper, who bought BTC in 2014, will receive a tax bill in the amount of $423 million. Michael Saylor will have to pay about $212 million , and Tyler and Cameron Winklevoss will face a tax claim of up to $1 billion.
Townsend’s concerns are shared by Marc Andreessen, founder of venture capital firm Andreessen Horowitz, and entrepreneur Mark Cuban. Experts are confident that in such a situation, crypto startups will become impossible, and the excessive tax burden will kill the market.
Earlier, Cardano founder Charles Hoskinson suggested that both US presidential candidates – Republican Donald Trump and Democrat Kamala Harris – are not ready to seriously engage in the development of the US crypto industry and will not bring benefits to the industry.
Source: Bits
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