Illinois has created a toll on a road it didn't build and doesn't maintain. The state's new 0.2% Digital Asset Privilege Tax appears to be the most punitive of its kind in the country and was quietly slipped into a budget bill with no public economic study, no stakeholder engagement, and no comparable precedent in traditional finance I could find.
Stocks, bonds, and derivatives face nothing like it. I am unsure what analysis was done to justify 0.2% was the right number other than it appears to be a plug number for a reverse-engineered $800 million revenue target.
Illinois could see developers relocating, exchanges routing around the state, and the blockchain innovation ecosystem that Illinois could have cultivated growing in other states. You don't build a digital economy by taxing the infrastructure layer. Illinois just put a tollbooth on the internet.
This Illinois law is remarkably bad - it will end up hurting the state, kill jobs and push innovation out of the state.
Coinbase has 1,517,628 customers (aka voters!) in Illinois.
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