Bill Miller IV Advocates No Bitcoin Tax Due to Decentralized Nature

Bill Miller IV, the Chief Investment Officer of Miller Value Partners, has asserted that governments should not tax Bitcoin. He argues that Bitcoin's decentralized nature and independent blockchain infrastructure eliminate the need for government intervention in maintaining or verifying ownership. This perspective was shared during an appearance on the Coin Stories podcast.

Miller emphasized that traditional assets, such as real estate, rely on government systems to enforce and record property rights, which in turn justifies taxation. However, Bitcoin's blockchain technology inherently enforces ownership and property rights without government involvement. This unique characteristic, according to Miller, makes the taxation of Bitcoin questionable. He noted that since governments did not create Bitcoin, taxing it in the same way as physical property does not align with traditional tax principles.

Miller also highlighted that the administrative infrastructure typically required to manage ownership of assets like real estate is unnecessary for Bitcoin. He pointed out that taxes on traditional assets often go toward maintaining records of ownership, a function that Bitcoin's blockchain performs automatically. This automation further supports his argument that Bitcoin should not be subject to the same taxation rules as traditional assets.

Miller acknowledged the ongoing discussion around exempting Bitcoin from capital gains tax, referencing a proposal by Eric Trump, son of Donald Trump. However, he emphasized that the absence of a wash sale rule on Bitcoin is a significant advantage, regardless of whether capital gains tax exemptions are implemented. He also argued that there is a strong case against imposing property taxes on Bitcoin, similar to those on real estate.

Despite Bitcoin's growing adoption, Miller noted that tax uncertainties continue to be a barrier for institutional investors. He explained that the complex taxation rules around Bitcoin, including those related to bad income from ETFs, create significant impediments for fund managers. This regulatory uncertainty, according to Miller, indicates that it is still early in Bitcoin's development and that the regulatory landscape is still evolving.

Miller IV is the son of veteran investor Bill Miller III, who in January 2022 revealed he had allocated 50% of his net worth to BTC and investments in major industry players, including Michael Saylor’s Strategy and mining firm Stronghold Digital Mining. This familial background underscores the Miller family's long-standing interest and investment in the cryptocurrency space.