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Jack Dorsey sends strong message on crypto tax
Twitter (now X) co-founder Jack Dorsey called for tax relief for Bitcoin (BTC) transactions in the United States.
On Oct. 9, Dorsey posted on X, “we need a de minimis tax exemption for everyday Bitcoin transactions.”
The U.S. Internal Revenue Service (IRS) classifies digital assets as property, requiring individuals to calculate and report capital gains on every transaction, even for purchases as small as a cup of coffee.
A “de minimis exemption” would remove this hurdle by allowing low-value transactions, such as groceries, rideshares or meals, to be excluded from capital gains reporting.
Tax levied on digital assets
Crypto investors in the U.S. face a complex tax structure that varies sharply by state. The IRS classifies digital assets as property, meaning that every sale, swap, or purchase triggers a capital gains event. Short-term gains, on assets held for less than a year, are taxed at income rates ranging from 10% to 37%, while long-term holdings qualify for lower rates of 0%, 15%, or 20%, depending on income level.
Additionally, crypto earned through staking, mining, or airdrops is taxed as regular income at the time it is received.
States like California, New York, and Hawaii levy some of the highest crypto taxes, with combined rates exceeding 10% for top earners. Meanwhile, Florida, Texas, Wyoming, Nevada, and South Dakota impose no state income tax, offering crypto traders a major advantage. However, Washington State stands out, despite lacking an income tax, it applies a 7% excise tax on long-term capital gains over $250,000, which includes crypto.
Dorsey’s broader Bitcoin vision
Dorsey has held a long-standing belief that Bitcoin can serve as both a store of value and a medium of exchange. On Oct. 8, his company Block Inc. introduced merchant tools through its Square unit, allowing small businesses to accept Bitcoin payments with no fees through 2026.
Dorsey’s comments came as Bitcoin slipped below key support levels this week, pressured by a stronger dollar and investor caution ahead of Federal Reserve Chair Jerome Powell’s remarks.
At the time of writing, Bitcoin was trading lower at $121,025, down 1%, per Kraken's price feeds.
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Cynthia Lummis proposes new bill
Sen. Cynthia Lummis (R-Wyo.) introduced Senate Bill 2207, aiming to amend the Internal Revenue Code of 1986 to “reform the treatment of digital assets.” The draft defines a digital asset as “any digital representation of value recorded on a cryptographically secured distributed ledger.”
Announcing the proposal on X, Lummis posted: “If only we had a bill for that… Oh, wait,” sharing an image of the bill’s first page.
This comes as the U.S. government’s second week of partial shutdown has slowed down the cryptocurrency legislation efforts.
Senate Banking Committee members are drafting a digital asset bill to clarify oversight roles between the U.S. Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC). However, the absence of an agency staff to advise on regulatory scope and technical definitions has slowed the progress sharply.
Meanwhile, the Senate Agriculture Committee, which oversees the CFTC, has yet to release its version of the crypto framework, leaving uncertainty over which proposals could move forward once the government reopens.
In September, Republican lawmakers also pushed for a procedural strategy to combine a ban on U.S. central bank digital currencies (CBDCs) with broader crypto market structure legislation.
This article has been published in thestreet.com via Yahoo News.
