PARITY Act or 'Pay More' Act? Bitcoin Miners Cry Foul Over Tax Bill

A new bipartisan tax bill has Bitcoin miners seeing red—and red numbers on their tax returns. The PARITY Act, drafted by US Reps. Max Miller and Steven Horsford, aims to overhaul the Internal Revenue Code for digital assets, but the crypto community isn't exactly throwing a party. Actually, they're throwing something else entirely.

The controversy? The bill's wildly different treatment of proof-of-stake versus proof-of-work networks. Under the draft, earnings from cryptocurrency production get classified as gross income at fair market value upon receipt. But here's the kicker: proof-of-stake networks like Ethereum and Solana can defer those taxes until the asset is sold. Bitcoin miners? Not so much. Meanwhile, ETH and SOL holders get to play the tax man on their own timeline. Selective much?

Conner Brown, managing director of the Bitcoin Policy Institute, didn't hold back. He called the draft a "two-tier tax regime" that arbitrarily picks economic winners and losers. "It creates a two-tier tax regime, offering deferral to stakers while leaving miners stuck with the same phantom income problem that both parties acknowledged needed fixing," the Institute argued. Nothing says "innovation-friendly regulation" like taxing people for money they technically can't spend yet.

The bill does throw a bone to stablecoins defined under the GENIUS Act—there's a $200 de minimis exemption for everyday payments. But Bitcoin users? They're out in the cold. The Institute pointed out this is a big deal since Bitcoin represents roughly 60% of the total digital asset market cap. Buying coffee with BTC could still trigger capital gains reporting. Ouch. Nothing like paying the IRS while waiting for your oat milk latte.

Not everyone is ready to throw the whole thing in the trash, though. Cody Carbone, CEO of The Digital Chamber, sees it as a starting point. He's pushing for taxing both staking and mining rewards only upon sale, a broader de minimis exemption, and keeping basic wallet-to-wallet transfers tax-free. Simpler tax forms and clearer rules for lending and donating crypto are also on the wish list. Revolutionary concept: maybe don't make accountants rich every time someone moves their own money.

The bill may need some serious revisions before anyone calls it fair. At this rate, the only thing getting taxed more than Bitcoin miners is their patience.