Thursday, October 1, 2020
Richard Ainsworth (NYU) & Xiuyuan (Tony) Hu (LL.M. (Tax) 2013, NYU), A Proposal for Taxing Cryptocurrency In the Midst of the COVID-19 Pandemic, 98 Tax Notes Int'l 921 (May 25, 2020):
In this article, the authors present the case for a globally effective remedial tax on cryptocurrency transactions that could help fund multinational relief efforts, such as providing aid to jurisdictions affected by the COVID-19 virus and countries fighting the opioid crisis.
The remedial tax is a compromise. It recognizes and respects an individual’s legitimate financial privacy interest, but it also recognizes that financial anonymity will inevitably attract criminals. Legal and illegal uses of cryptocurrency are (and would remain) indistinguishable. While not perfect, the remedial tax offers a workable solution. It would assess a global tax on all cryptocurrency transactions with the proceeds kept in reserve for global emergencies, and it would accomplish this in a manner that respects legitimate local taxing interests. Ultimately, the remedial tax would only be imposed on transactions that, for whatever reason, a resident jurisdiction is unable to tax. Jurisdictions would conditionally cede the authority to impose the proposed remedial tax proposed to the U.N. or another supranational agency to achieve a level of justice not reachable today.