Several U.S. lawmakers have spoken up against the cryptocurrency tax provision in the $1 trillion infrastructure bill. While the bill has been revised from last week’s version, the text is still “unworkable,” according to Senator Pat Toomey. “I plan to offer an amendment to fix it.” Other lawmakers, including Sen. Ron Wyden, Rep. Warren Davidson, and Rep. Ted Budd have also voiced concerns.
Lawmakers Oppose Crypto Tax Provision in Infrastructure Bill
The U.S. Senate Committee on Banking, Housing, and Urban Affairs issued a statement by Ranking Member Pat Toomey Monday on a provision in the bipartisan infrastructure package that would tax cryptocurrency transactions. The statement reads:
Congress should not rush forward with this hastily-designed tax reporting regime for cryptocurrency, especially without a full understanding of the consequences. By including an overly broad definition of broker, the current provision sweeps in non-financial intermediaries like miners, network validators, and other service providers.
The senator from Pennsylvania added: “Moreover, these individuals never take control of a consumer’s assets and don’t even have the personal-identifying information needed to file a 1099 with the IRS. Simply put, the text is unworkable. I plan to offer an amendment to fix it.”
The crypto provision in the infrastructure bill has been highly criticized. Its aim is to step up tax enforcement on crypto transactions by imposing stricter reporting requirements on businesses. The provision is expected to raise $28 billion to help fund the $1 trillion infrastructure plan.
The language of the infrastructure bill was slightly revised by lawmakers on Monday, such as to clarify what defines a broker. However, Jerry Brito, executive director of Coin Center, explained that the changes in the revised bill are not sufficient, stating:
Yes, there were concessions but the latest language can still be interpreted by Treasury to cover miners, lightning nodes, and the like. If that’s not Congress’s intent, there are easy fixes they can adopt. There’s still time.
Another senator also wants the language of the bill changed. The chairman of the Senate Committee on Finance, Sen. Ron Wyden, who leads the chamber’s tax-writing panel, said he wants to tweak the crypto tax provision. Noting that “Americans avoiding paying the taxes they owe through cryptocurrency is a real problem that deserves a real solution,” he tweeted Sunday:
The Republican provision in the bipartisan infrastructure framework isn’t close to being that solution. It’s an attempt to apply brick and mortar rules to the internet and fails to understand how the technology works.
Other lawmakers who have voiced concerns regarding the crypto provision in the infrastructure package include Rep. Ted Budd and Rep. Warren Davidson.
Rep. Budd said Monday that the crypto regulations in the infrastructure bill are “devastating” for American jobs and the country’s competitiveness in the financial technology industry.
Rep. Davidson called the language in the bill “very sloppy,” tweeting: “This is really bad policy making its way through an infrastructure bill. It’s America essentially abandoning the fintech revolution.”
What do you think about the U.S. government taxing crypto transactions to fund the infrastructure plan? Let us know in the comments section below.