Several U.S. lawmakers opposed the cryptocurrency tax provisions in the $1 trillion infrastructure bill. Senator Pat Toomey said that although the bill has been revised from last week’s version, the text is still “not working.” “I plan to propose amendments to fix it.” Other lawmakers, including Senator Ron Wyden, Rep. Warren Davidson and Rep. Ted Budd, also expressed concern.
Lawmakers oppose crypto tax provisions in the infrastructure bill
The U.S. Senate Committee on Banking, Housing and Urban Affairs issued a statement Monday by ranking member Pat Toomey concerning the terms of the bipartisan infrastructure package that imposes taxes on cryptocurrency transactions. The statement is as follows:
Congress should not rush to implement this hastily designed cryptocurrency tax reporting system, especially without fully understanding the consequences. Because the definition of brokers is too broad, the current clause covers non-financial intermediaries such as miners, network verifiers, and other service providers.
The Pennsylvania senator added: “Furthermore, these people never control the assets of consumers and have not even submitted the personally identifiable information required for 1099 to the IRS. In short, words will not work. I plan to propose amendments. Fix it.”
The encryption provisions in the Infrastructure Act have been highly criticized. Its purpose is to strengthen tax enforcement on encrypted transactions by imposing stricter reporting requirements on companies. The grant is expected to raise US$28 billion to fund a US$1 trillion infrastructure program.
On Monday, lawmakers made minor changes to the wording of the infrastructure bill to clarify the definition of a broker. However, Jerry Brito, the executive director of Coin Center, explained that the changes in the revised bill were not enough, noting:
Yes, there are concessions, but the Ministry of Finance can still interpret the latest language to cover miners, lightning nodes, etc. If this is not the intention of Congress, they can adopt some simple fixes. There is still time.
Another senator also wants to change the language of the bill. Senator Ron Wyden, chairman of the Senate Finance Committee and head of the Senate’s tax writing team, said he wants to adjust the crypto tax provisions. He tweeted on Sunday that “Americans avoid paying taxes through cryptocurrency is a real problem and it is worthy of a real solution”:
The Republican clause in the bipartisan infrastructure framework is far from a solution. It tried to apply physical rules to the Internet, but failed to understand how the technology works.
Other lawmakers who have expressed concerns about the encryption clause in the infrastructure package include Congressman Ted Budd and Congressman Warren Davidson.
Rep. Bard said on Monday that the encryption regulations in the Infrastructure Act are “destructive” for employment in the United States and the country’s competitiveness in the financial technology industry.
Rep. Davidson called the wording in the bill “very sloppy” and wrote on Twitter: “Passing the infrastructure bill is a very bad policy. The United States has basically abandoned the financial technology revolution.”
What do you think of the US government’s taxation of crypto transactions to fund infrastructure projects? Let us know in the comments section below.
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