What happened?
Senators Cynthia Lummis and Bernie Moreno have raised concerns about a tax issue affecting digital asset companies, stemming from a Joe Biden-era measure. This tax, part of the corporate alternative minimum tax (CAMT), imposes a 15% minimum on corporate profits and could inadvertently harm US digital asset firms. The senators have requested Treasury Secretary Scott Bessent to revise this policy to maintain competitiveness against foreign companies.
Who does this affect?
The tax impacts US companies that hold significant digital assets by taxing them on unrealized gains. This could force these companies to sell assets to cover tax liabilities, limiting their ability to innovate and expand. In contrast, foreign competitors are not subject to similar tax burdens, potentially disadvantaging American firms in the global market.
Why does this matter?
This matter affects the competitive landscape for the US digital asset industry and has broader market implications. If the current tax structure remains unchanged, US companies may face financial disadvantages compared to international counterparts, potentially stifling growth and innovation within the sector. Adjusting the tax to exclude unrealized gains could help preserve the United States’ leading position in the digital asset space.