Clock is ticking for $1 trillion infrastructure bill’s tax provision
Last week’s $1 trillion infrastructure bill that includes controversial crypto taxes have led to a last-minute frenzy keeping the entire crypto community on alert. According to the latest tweets from Wyoming Senator Cynthia Lummis, the final voting on proposed amendments will take place on Monday, August 9 at 9AM.
The bill has the potential to threaten the development of crypto in the U.S. and drive innovation in the industry to other countries by saddling miners, validators, smart contracts, open-source developers and others with huge reporting obligations. The bill is being extra tight on crypto and requires crypto exchanges “to surveil” their customers’ transactions even more closely than traditional financial services organizations.
A latest amendment submitted on Thursday by Senators Rob Portman (R-Ohio), who wrote the original tax provision, and Mark Warner (D-Va.) has caused a big stir and is deemed “disastrous”. Their provision included ruleson how “digital assets” are taxed to help fund the $1 trillion bipartisan infrastructure bill. The provision would require brokers to report gains in addition to reporting transactions of more than $10,000 to the Internal Revenue Service (IRS), which is already mandated. The provision was met with backlash, as crypto advocates demand lawmakers to clarify the definition of a “broker.”
Countering this amendment is the alternative, the Lummis-Wyden-Toomey amendment. Simply put, this amendment clarifies in law what most people already believe, that validators of distributed ledger data, like miners for example, or hardware wallet providers and software developers, should not be required to report transaction data to the IRS.
Senator Lummis noted that the lawmakers have to come to an agreement on allowing the amendments and added that the amendment is “being held up because of conflict between senators over the 30-hour rule, which allows the Senate to consider/read/review a bill for up to 30 hours before voting on it”.
Lummis further said that some senators are too focused on passing the bill too quickly:
So we’re at an impasse. I understand my colleagues’ positions. But real people are going to be hurt if we do not change the language in this bill. Tomorrow we’ll be back in session and again work to convince our colleagues and Senator Schumer that our amendment deserves a vote.
— Senator Cynthia Lummis (@SenLummis) August 9, 2021
As reported by Bloomberg, the 30-hour period ends Tuesday early morning. If the Senators do not get a unanimous vote for the amendment, efforts could turn fruitless and the bill will be passed with the original language. The possibility of this has already made prominent crypto players and industry experts call out their criticism. For example, the Coinbase CEO who said on Twitter, with whom Tesla’s Elon Musk agreed:
Agreed, this is not the time to pick technology winners or losers in cryptocurrency technology. There is no crisis that compels hasty legislation.
— Elon Musk (@elonmusk) August 6, 2021
Wyoming Senator, Cynthia Lummis again called for a cautious approach:
Our position as the global financial leader is a privilege, not a right. Other countries have a head start on us in the development of digital assets. If we get this wrong, we handicap ourselves and put our future prosperity at risk.
— Senator Cynthia Lummis (@SenLummis) August 8, 2021
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Author: Peter Siu