Crypto is about to reshape taxes and cities

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Taxes, CityCoins founder patrick stanley said, can stop being a mind-numbing civic ritual and become an exercise in freedom – if we symbolize and calibrate them in the right way. Stanley’s crypto-based invention is what he calls “an optional, as opposed to obligatory, opportunity tax,” in which boosters tithe a particular city with crypto because they trust the municipality. and in his mission. “They want to see the city operate as an allocator of capital, and they want to bet on the city’s success,” Stanley said. said in a podcast interview. Essentially, they can encourage a city government through computer processing worth millions, if not billions of dollars, the equivalent of a golden “Like” button.

CityCoins launched its first project with the city of Miami in August 2021, raising $2.5 million in “pseudo-tax” revenue in its first 20 days. New York and Austin now have their own rooms. In the CityCoins matrix, miners are given a city-specific coin, like MiamiCoin or NYCCoin, by exchanging STX, the token for Stacks, a protocol that runs on top of the Bitcoin network. (Stacks is also Stanley’s former employer.) In addition to the new CityCoins tokens given to miners, STX holders who participate in Stacks consensus process receive 70% of the STX spent to mine CityCoins, while city governments receive 30%. Cities that are not allowed to hold crypto can immediately convert their STX earnings into dollars. It’s inside some ways to free up cash for cities: a boon for governments that, in the United States at least, seem perpetually cash-strapped and pressured into austerity. In a victory lap interview with pro-crypto Miami Mayor Francis Suarez, Stanley called CityCoins a both disruptive and deeply familiar. Cities get 30% of the STX from miners – no more, no less – because that’s the tax rate people are used to in the United States.

It’s not like the current US federal tax system is appreciated. hollowed out By Intuit’s 20-year effort to cash in on Tax Day, the system that American taxpayers are fighting over is both esoteric and costly. Things get even murkier for the millions of crypto holders; Federal taxation on crypto is governed by a chimera of tax rulings and FAQs. “They don’t really have good regulations yet,” says Emery Sheer, a Florida-based accountant who runs a Youtube channel on crypto-taxation. Sheer says that many of the FAQs the IRS uses to clarify crypto taxation do not mention crypto at all, instead covering congruent asset classes that are also defined as property. “We kind of have to guess,” he says.

As Congress and the White House ponder the future of crypto and creep towards clarity – is it an investment vehicle, a digital asset, a currency, some kind of glitz Kohl’s Moneyor a combination? – city-level developments like CityCoins can beat federal lawmakers to the punch, reshaping city taxes in the image of crypto and, in the process, forcing national politics to follow its lead.

If Suarez and Stanley are successful, the launch of CityCoins, bolstered by the uncertainty of crypto taxes, will mean a sea change for taxes. On the one hand, taxes may take on an entirely new form, following in the footsteps of crypto, which claimed to improve on its fiat predecessor while becoming another investment vehicle. But unlike fiat or other forms of crypto-wealth, which require lobbyists or other workarounds to shape politics, CityCoins and its ilk aim to control a city’s tap, making its political power immediate. . The “we” of the city may change in the process, defined no longer by geographic boundaries or bodily location, but by symbolic community and portfolio distribution.

Antiquity offers a distributed ledger of its own, suggests Erica Robles Anderson, specialist in digital taxation. City-states and empires ruled front and back physical coins as political arenas – the state held sovereign control over the front of the coin, but local currencies laminated their own symbols on the reverse. Beliefs, commitments and beliefs at the micro or regional level emerged based on who would accept certain offers.

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