Trump’s crypto czar, David Sacks, has taken a firm stand against a proposed tax on cryptocurrency transactions, calling it a dangerous idea that could harm innovation in the crypto industry.
During a recent episode of the popular “All In Podcast,” Sacks pushed back hard against the suggestion of a tiny 0.01% tax on every crypto trade. He argued that such a tax, even if it sounds small, could grow into something much bigger and more harmful over time.
Sacks, who co-hosts the podcast alongside other influential tech leaders, did not mince words when rejecting the proposal. He pointed to the history of income tax in the United States as a warning. Income tax, he explained, started as a modest levy on only the wealthiest Americans but eventually grew to affect nearly everyone.
Sacks fears a crypto transaction tax could follow the same path, starting as a minor fee but expanding into a heavy burden on everyday users and businesses in the crypto space.
“This kind of tax is burdensome,” Sacks declared during the podcast. “I don’t support new taxes, period, especially when people promise they’ll stay small. History shows they never do.”
The idea of taxing cryptocurrency transactions has surfaced as governments around the world grapple with how to regulate and exploit the rising digital currency market.
Countries like the United States, India, and South Korea have already introduced or considered various forms of crypto taxation, from capital gains taxes to levies on mining operations.
A transaction tax, which would impose a fee on every trade, is viewed by many in the crypto community as particularly intrusive. Critics like Sacks argue it could discourage trading, reduce market liquidity, and push users toward unregulated platforms or offshore exchanges.
Two years ago, Coinbase considered relocating operations outside the U.S. due to the government’s lack of clear regulations. However, following the recent White House Crypto Summit, Coinbase’s CEO is now optimistic about the U.S. regulatory environment.
Sacks also highlighted the practical challenges of implementing such a tax. Cryptocurrency transactions happen across borders and on decentralized platforms, making it difficult for any single government to enforce a tax effectively.
He suggested that attempts to impose such measures could lead to unintended consequences, like driving crypto activity underground or into jurisdictions with lighter regulations.
