It is no longer news that the US Senate plans to pass a new Bipartisan Infrastructure Bill that will cost an estimated $1.2 trillion and has a provision that will see the cryptocurrency industry taxed to raise around $28 billion of the amount.
The wording of the draft bill, which introduces new tax reporting requirements for brokers of digital assets that have been described as “too broad and vague”, has raised serious concerns from the industry and set the Senate on a path to modifying it for better clarity and less strict consequences.
The cryptocurrency industry is expressing its dissatisfaction with the bill and its amendments. One analyst, Lark Davis, has stated that the bill was not very far from being on par with China’s crackdown on cryptocurrencies.
“The USA is basically trying to pull a China right now by crushing the crypto industry with this stupid bill,” he said in a tweet, adding “If the crypto bill passes as is, then it will essentially put America out of the crypto game. Economic opportunity as big as the internet is about to be pushed overseas, and millions of Americans will be even more left behind the crypto revolution than they already are.”
The comment alludes to development around amending the bill that has polarized Congress, making two separate proposed amendments emerge. Thursday saw Senators Rob Portman (R-Oh), who drafted the original tax provision, Mark Warner (D-Va) and Kyrsten Sinema (D-Ariz) propose an amendment that would provide an exemption from the tax reporting obligation for validators and developers who worked on proof-of-work (PoW) networks such as Bitcoin, leaving proof of stake validators and decentralized finance protocols included in the tax report requirements and potentially still subject to higher taxes.
Previously on Wednesday, Sens. Ron Wyden (D-Ore), Pat Toomey (R-Pa), and Cynthia Lummis (R-Wyo) introduced an amendment that tried to curtail the implications of the previous amendment by narrowing down the definition of a “broker,” explicitly excluding validators, hardware and software makers as well as protocol developers. This amendment had the support of the crypto-community as it would have been a win for the industry.
However, a turn of events today has seen the White House show support for the former amendment proposed by the Portman cohort. According to a CNBC report, a statement allegedly made by the deputy press secretary Andrew Bates of the White House stated that the Biden administration was “pleased” with the amendment.
“The Administration believes this provision will strengthen tax compliance in this emerging area of finance and ensure that high-income taxpayers are contributing what they owe under the law. We are grateful to Chairman Wyden for his leadership in pushing the Senate to address this issue, however, we believe that the alternative amendment put forward by Senators Warner, Portman, strikes the right balance and makes an important step forward in promoting tax compliance.”
Other industry key players have also been on the pulse of the events. Efforts are being directed at lobbying the senate and there have been calls for residents to call their senators and make their position known. Notably, a vote on the bill is likely to be held on Saturday, August 7.