Illinois 0.2% blanket tax on every crypto transaction, proposed in July as part of the state budget, continues to bring back.
Mike Selig, chairman of the Commodity Futures Trading Commission (CFTC), criticized federal lawmakers. He warned that the law could cause Chicago to lose its money.
In a recent opinion, Selig argued that there is no need for a criminal code for crypto. He said the federal government is moving forward with the CLARITY Act.
However, Illinois lawmakers thought they knew better than federal lawmakers who have been working to regulate the cryptocurrency markets for years.
The Chicago Mercantile Exchange (CME), the world’s largest stock exchange, is based in Illinois. It also offers 24/7 crypto trading.
Selig added that such a move would cause investors to flee the state, making it the ‘last resort’ in Chicago.
As blockchain technology continues to revolutionize our financial markets, the choice to hijack crypto wallets instead of expanding the public economy with smart policies may go down in history as the last trade of Chicago.
Will the federal crypto tax law be delayed?
Coinbase’s chief legal officer Paul Grewal also agreed with Selig’s actions, calling them 0.2% tax one of the most useless policies.
Just when it seemed like we had enough dumb tax laws, here’s one more. There is also no effective way to kill a skill that taxes the use of it. The people of IL deserve better.
The Illinois tax law goes into effect in January 2027.
Well, even though the CLARITY Act aims to promote technology and crypto onshore and protect job-related activities, it doesn’t really have anything to do with taxation. As such, if it passes its current status, there will be no crypto tax implications for US users.
In fact, the bill is stuck in the Senate and will not provide crypto tax relief even if it passes today.
However, the US Congress (House) has reviewed seven crypto tax proposals that address key issues, including double taxation mining and staking rewards. Unfortunately, this too may take some time to be implemented, as the hard calendar isn’t until mid-November.
Overall, there is a possibility that tax proposals may regain momentum after the elections. And the pace of crypto tax legislation will also depend on who controls Congress after the November midterms.
Brief Summary
- CFTC Chair Selig criticized Illinois lawmakers and warned that a 0.2% tax on crypto would put Chicago at risk of losing its financial markets. The
- The CLARITY Act does not provide tax relief for US crypto users, as many government proposals would take a long time to be implemented.
