Several U.S. Senators have been haggling over the amendment terminology in a cryptocurrency tax reporting section of the Infrastructure Investment and Jobs Act, which is one of many offsets designed to pay for the bill’s expenditures. The White House and Senate Majority Leader Chuck Schumer are putting great time pressure on legislators, to the point where the package may still be advanced to a vote without the amendment being addressed.
U.S senators are divided on how to tax and regulate cryptocurrency transactions, threatening to stall the approval of Joe Biden’s $1 trillion bipartisan infrastructure package. The White House has advocated for narrowing the so-called tax gap, which is the difference between taxes owed to the US government and those paid, through a variety of methods, including requiring big cryptocurrency transfers to be verified.
Ron Wyden, a Democratic senator from Oregon who leads the Senate finance committee, proposed an amendment to the infrastructure bill earlier this week alongside Republicans Pat Toomey and Cynthia Lummis to clarify the meaning of “broker.” According to the White House, the cryptocurrency reporting requirements alone would bring in an extra $28 billion for the US Treasury.
The bill has attracted numerous critics, Coinbase CEO Brian Armstrong asked cryptocurrency supporters in the United States to endorse amendments proposed by pro-crypto Senators Ron Wyden, Patrick Toomey, and Cynthia Lummis, which call for a more precise definition of crypto intermediaries. Senator Toomey has previously requested that miners and software developers be exempt from the bill’s crypto tax reporting requirements.
Jeff Stein, White House economics reporter for The Washington Post and Founder of the Ithaca Voice recently tweeted that,
It is remarkable that of all the provisions in a $1 trillion infrastructure bill — crucial to the nation’s water systems; electric grid; trains; highways/bridges/ports etc — the issue generating the most heat at the goal line is … cryptocurrencies
To this, Alex Gladstein, Chief strategy officer of the human rights foundation stated that “what’s most remarkable is that Bitcoin has developed an immune system capable of fighting government regulation at the highest levels inside the most powerful nation on earth. All without any centralized leadership. A peaceful but powerful incentive structure drives it forward.”
Critics claim that by imposing significant reporting requirements on miners, validators, smart contracts, open-source developers, and others, the law risks the development of crypto in the United States and driving industry innovation to other nations.
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