Rep. Steven Horsford pitches PARITY Act as 'durable floor' for crypto tax at Consensus Miami

The Nevada Democrat told Professor Yesha Yadav that incremental, bipartisan reform is the path forward as Senate negotiations on the CLARITY Act stall.

What to know:

• Rep. Steven Horsford, co-author of the bipartisan PARITY Act, told the audience at CoinDesk's Consensus Miami conference Tuesday that crypto tax policy needs to advance through narrow, durable reform rather than a single comprehensive overhaul.
• He admitted Senate negotiations on the CLARITY Act between Senators Thom Tillis and Angela Alsobrooks seemed to be "on hold," slowing the broader bipartisan market-structure framework.
• Horsford framed crypto and digital-asset policy as a tool for closing the wealth gap, saying "no one party should own crypto."

Congressman Steven Horsford told CoinDesk's Consensus Miami conference Tuesday that his bipartisan PARITY Act is an incremental path forward in a Congress where Senate market-structure negotiations have stalled.

“PARITY is designed to set a durable floor, not to be the last word,” he said, noting that existing problems need to be resolved “clearly within the tax code's jurisdiction in order to have the protection for the consumer, small businesses, and those who are owners of these assets to define whether it gets treated as income or capital gains.”

The Nevada Democrat co-authored the PARITY Act discussion draft with Republican Representative Max Miller of Ohio in December, and revised it on March 26. He told moderator Yesha Yadav that he prefers a narrow approach over comprehensive alternatives, including Sen. Cynthia Lummis's proposal. The risk of a comprehensive bill, Horsford said, is that "it pairs genuinely helpful provisions with definitional language that is so broad that it creates other problems."

PARITY's headline provisions include a stablecoin-payments cost-basis test, a five-year tax-deferral election on staking and mining rewards and an extension of wash-sale rules to digital assets. Horsford said that while retirement account access is absent in present drafts, he considers it “something that I personally want to see, because in order to close the wealth gap, we have to be able to help people plan for their retirement. Digital assets are a way to do that. I know that there is genuine bipartisan appetite for us to work on this, but rushing it and just putting language in a bill without getting it right creates these unintended consequences.”

On the broader policy climate, Horsford said that Senate negotiations to advance the CLARITY Act between Senators Thom Tillis and Angela Alsobrooks seem to be "on hold." When asked whether bipartisan crypto legislation could pass before the November midterms, he declined to commit to a timeline.

"It's less about a timeline and more about getting it right," he said. "You can rush and pass a bill in Congress that has unintended consequences that you won't be able to fix later."

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The crypto market structure Clarity Act needs to get to its next step, a Senate hearing, this month to have a reasonable chance, Garlinghouse said.

What to know:

• Ripple CEO Brad Garlinghouse maintains hope for the Senate's Clarity Act, the crypto industry's top policy aim, but he said its survival depends on the next two weeks.
• The market structure bill is awaiting the scheduling of a Senate Banking Committee hearing, though bank lobbyists are still dragging their feet.

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