The importance of tax policy to support PoS (Proof of Stake) technology was highlighted in the letter sent by members of the United States Congress Blockchain Caucus. The group implored the Internal Revenue Service (IRS) in a letter to protect PoS technology from overtaxing.
In the letter, members of the caucus outlined the reasons for the need to support PoS technology with a carefully written tax policy. Proof of Stake is a type of consensus algorithm by which a cryptocurrency blockchain network aims to achieve distributed consensus.
Protect PoS plea stresses the importance of tax policy
The Congress Blockchain Caucus group includes Tom Emmer who recently spoke at length about the strength of blockchain. The group explicitly noted that the PoS would support America’s ingenuity and economy. They stressed that overtaxing the technology might limit its potentials.
The group noted that if they hope to get the best out of the technology, then a policy to protect PoS from overtaxing should be created.
In the letter addressed to the commissioner in charge of the IRS, Charles P. Rettig, the group ardently listed the benefits of blockchain and PoS work and how they both work.
Emmer argued that most of the congressmen have a biased view about Bitcoin and everything related to it.
Block rewards classified as discoverable goods tax
The taxation policies of the U.S. (United States of America) have often been described as complicated processes to follow. Crypto holders and traders have always been subject to impartial treatment by the taxation policies.
The U.S has still failed to conclude what class digital assets can be classified. Imposing taxes on foreign goods and commodities is not feasible in the country.
The congressmen noted that rewards gotten from blocks by miners should be classified under the discoverable goods tax.
A group that actively supports PoS in the country tweeted it is overjoyed by the letter sent to the IRS by the group of congressmen.
With some of the Congress members giving their reasons why the IRS needs to create a protect PoS policy, others may be swayed by developments in the coming weeks.