Representative Matt Gaetz (R-FL) has introduced legislation that would allow American citizens to pay their federal income taxes with Bitcoin.
Gaetz was inspired by his visit to El Salvador—a nation that has adopted Bitcoin as legal tender. He aims to modernize the U.S. tax system and establish the country as a leader in digital currency integration.
The proposed bill instructs the Secretary of the Treasury to set up a system for accepting Bitcoin as a payment method for federal taxes. It requires an immediate conversion of Bitcoin to U.S. dollars at the time of each transaction to mitigate risks associated with Bitcoin’s price volatility.
“My groundbreaking legislation will modernize our tax system by allowing federal income tax to be paid with Bitcoin,” Gaetz stated. He further explained the potential benefits, saying, “By enabling taxpayers to use Bitcoin for federal tax payments, we can promote innovation, increase efficiency, and offer more flexibility to American citizens.”
Gaetz’s initiative reflects his experiences in El Salvador, where President Nayib Bukele implemented Bitcoin as legal tender. Gaetz sees this as a model for the U.S., suggesting that embracing digital currencies can keep the nation at the forefront of technological progress.
The move by Gaetz aligns with a growing enthusiasm for cryptocurrency among Republicans, setting up a clear contrast with the Biden administration’s more cautious approach.
Former President Donald Trump, speaking at a recent event, expressed his support for the cryptocurrency sector: “I will end Joe Biden’s war on crypto,” Trump declared. “We will ensure that the future of crypto and the future of Bitcoin will be made in America.”
The bill also outlines specific regulations for the Treasury to implement, including guidelines on how tax payments via Bitcoin should be processed and how associated non-tax matters should be handled by the taxpayers and financial intermediaries.
With this legislation, Rep. Matt Gaetz is pushing for a significant update to the U.S. tax system. Gaetz’s proposal places him and his supporters at the center of a pivotal financial policy shift.