Ron Paul States that Crypto Assets Should Be Tax-Free
Ron Paul is a prominent American public figure, he is an author and a physician who was also a presidential candidate and a congressman. In a recent blog post, Paul expressed his opinions regarding the taxation of cryptocurrencies and the effects of the policies that the Federal Reserve is currently employing.
Ron Paul Disagrees with Current Strategies
Paul stated that in his opinion people’s capital gains on digital currencies should be exempt from taxes. He also added that people having reservations about the steadiness of virtual assets should realize that “formal” money can be unstable too. Paul then expressed his disagreement with the Federal Reserve of the United States in terms of the escalated interest rates. He made his case by stating that while the practice of raising and lowering the money supply to manage interest rates may give a false impression of success and prosperity, it nevertheless leads to the misallocation of resources due to the misunderstanding of the market situation.
Policies Used by Central Banks Will Be Disastrous
It is noteworthy that the bitcoin whitepaper attempted to resolve similar issues. One of these issues is the practice of increasing the money supply by purchasing large assets and introducing new money. The strategy of quantitative easing was used globally by central banks and financial organizations in effort to mitigate the effects of the 2008 Crisis.
Paul also spoke about the fact that central banks are still printing more money despite the swell of inflation. He declared that the practices of central banking lead to disproportionate wealth. He said the once inflation got past the middle class and into the working class, any increase in purchasing power will only lead to more inflation. He remarked that, on the other hand, there can only be a limited number of BTC in the world, which makes it a deflationary currency.
He predicted that a new recession will happen due to the inadequate strategies used by the Federal Reserve. He offered a solution to the looming crisis by suggesting the auditing of federal operations and excluding cryptocurrencies and precious metals from taxation.
During a recent Senate hearing that discussed the crypto ecosystem, the fed's strategies were criticized by Nouriel Roubini, the famous economist. It is worth mentioning, however, that Roubini has always been cynical regarding virtual currencies and blockchain tech.
Complex Tax Filing Process
As per a report by CryptoGlobe, the process of tax filing for digital currencies is unnecessarily complex. This is due to the fact the IRS categorizes cryptocurrencies as property or sometimes as an asset class akin to stocks. The process of reporting gains for taxes requires the investors to examine the exchanges they used in trading as well as all the transaction logs of their personal wallets. Therefore, a new method for tax filing should be created and it should be more economical and efficient in addition to being far less complicated.