Bill Miller IV: Bitcoin Shouldn’t Be Taxed as Property
Key Takeaway: Bitcoin doesn’t require government infrastructure to verify ownership thanks to blockchain technology, making taxation of Bitcoin unreasonable according to the investment expert’s perspective.
Source: Britannica
Fund manager Bill Miller IV states that the government has no right to tax Bitcoin because managing ownership requires no administrative efforts on their part.
“For them to reach their hand in there doesn’t make any sense,” Miller shared with Natalie Brunell on the Coin Stories podcast.
Blockchain Records Ownership, Not the Government
Known for his early belief in Bitcoin’s long-term value, Miller argues that, unlike traditional assets like real estate, Bitcoin doesn’t rely on government-run systems to confirm who owns what.
“When you buy or sell a house, all those recordation taxes and fees go toward maintaining a system that tracks ownership,” Miller explained. “The reality is, if you think about why you pay taxes in society, it’s to enforce property rights.”
Miller said this is not necessary with Bitcoin. “The government didn’t create Bitcoin, so that is an important point to keep in mind,” he said, adding:
“The blockchain does that property automation for itself, right?”
Earlier this year, rumors circulated that Eric Trump, son of US President Donald Trump, proposed eliminating capital gains taxes on certain US-based cryptocurrencies. Regarding the possibility of Bitcoin being exempt from capital gains tax, Miller said: “Whether that ultimately happens or not, who knows, but it is very cool that there is no wash sale rule on Bitcoin.”
Miller was unsure if Bitcoin could ever be subject to property tax, similar to annual real estate taxes based on market value. Nevertheless, he believes “there’s a good argument for it not to be taxed” in such a manner.
Bitcoin Tax Uncertainty Signals “It’s Still Early”
Meanwhile, Miller pointed out that even traditional asset managers still struggle to incorporate Bitcoin into portfolios, largely due to unclear tax treatment.
“Even as fund managers, we still face huge impediments to actually buying it,” he said. “That’s because of tax rules around bad income if we buy ETFs and sell them at the wrong time. So all of that needs to be figured out.”
“That’s why I continue to say it’s still early,” he added. “The taxation rules around Bitcoin are still evolving, and they’re really interesting.”
Bill Miller IV is the son of legendary investor Bill Miller III, who famously beat the S&P 500 for 15 consecutive years while managing funds at Legg Mason. In a 2022 interview, Miller III revealed that 50% of his net worth is tied to Bitcoin and related investments, including major industry names like MicroStrategy and the mining firm Stronghold Digital Mining.
