This is the Cato Daily Podcast for Wednesday, January 12, 2022.

I'm Caleb Brown.

What do members of Congress hope to get out of taxing

cryptocurrencies?

We know that it's at least a few billion dollars a year, but even that number seems suspect.

Nick Anthony at the Cato Institute's Center for Monetary and Financial Alternatives evaluates

the claims about the tax revenue and the dubious benefits of taxing

crypto.

Why is cryptocurrency even discussed in a bill that is nominally about infrastructure.

It does seem weird to have cryptocurrency

as a hinge point of the infrastructure bill, but really it's because it's been found as a pay-for provision.

Congress ultimately decided that somehow or some way

cryptocurrency taxation was going to yield 28 billion dollars over the next 10 years.

This is such an infant industry and it's hard to even imagine how those taxes would be collected.

The IRS has issued some guidance.

Other regulatory agencies have issued guidance,

sometimes in opposition to one another in terms of the tax treatment

of crypto assets.

And so it's very confusing, and so how does Congress expect to collect taxes on

cryptocurrency exchanges?

Unfortunately it's not really clear. They set in this new provision that basically anyone who is working in the industry has effectively been labeled a broker. It needs to report information about exchanges.

And this goes far beyond having like coin base or Robin Hood, the people we think of as brokers traditionally.

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