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Rep. Steven Horsford pitches PARITY Act as 'durable floor' for crypto tax at Consensus Miami
TL;DR
Rep. Steven Horsford introduced the PARITY Act at Consensus Miami, aiming to establish a foundational framework for crypto taxation. The act seeks to clarify tax treatment for digital assets, providing protections for consumers and small businesses amidst stalled Senate negotiations.
Key points
- Rep. Horsford introduced the PARITY Act at Consensus Miami
- The act aims to clarify crypto tax treatment for consumers and businesses
- Senate negotiations on crypto legislation are currently stalled
Mentioned in this story
Steven HorsfordMax MillerConsensus MiamiCynthia LummisThom TillisAngela Alsobrooks
Congressman Steven Horsford told CoinDesk's Consensus Miami conference Tuesday that his bipartisan PARITY Act is an incremental path forward in a Congress where Senate market-structure negotiations have stalled.
“PARITY is designed to set a durable floor, not to be the last word,” he said, noting that existing problems need to be resolved “clearly within the tax code's jurisdiction in order to have the protection for the consumer, small businesses, and those who are owners of these assets to define whether it gets treated as income or capital gains.”
The Nevada Democrat co-authored the PARITY Act discussion draft with Republican Representative Max Miller of Ohio in December, and revised it on March 26. He told moderator Yesha Yadav that he prefers a narrow approach over comprehensive alternatives, including Sen. Cynthia Lummis's proposal. The risk of a comprehensive bill, Horsford said, is that "it pairs genuinely helpful provisions with definitional language that is so broad that it creates other problems."
PARITY's headline provisions include a stablecoin-payments cost-basis test, a five-year tax-deferral election on staking and mining rewards and an extension of wash-sale rules to digital assets. Horsford said that while retirement account access is absent in present drafts, he considers it “something that I personally want to see, because in order to close the wealth gap, we have to be able to help people plan for their retirement. Digital assets are a way to do that. I know that there is genuine bipartisan appetite for us to work on this, but rushing it and just putting language in a bill without getting it right creates these unintended consequences.”
On the broader policy climate, Horsford said that Senate negotiations to advance the CLARITY Act between Senators Thom Tillis and Angela Alsobrooks seem to be "on hold." When asked whether bipartisan crypto legislation could pass before the November midterms, he declined to commit to a timeline.
"It's less about a timeline and more about getting it right," he said. "You can rush and pass a bill in Congress that has unintended consequences that you won't be able to fix later."
Q&A
What are the main provisions of the PARITY Act introduced by Rep. Horsford?
The PARITY Act includes a stablecoin-payments cost-basis test, a five-year tax-deferral election on staking and mining rewards, and extends wash-sale rules to digital assets.
Why is the PARITY Act considered a 'durable floor' for crypto tax legislation?
Rep. Horsford describes the PARITY Act as a 'durable floor' because it aims to provide a foundational framework for crypto taxation while addressing existing issues without being overly comprehensive.
What challenges does the PARITY Act face in Congress?
The PARITY Act faces challenges due to stalled Senate negotiations on crypto legislation, with no clear timeline for bipartisan support before the upcoming midterms.
