Blockchain News

Crypto Users to Face Tax Scrutiny According to New Infrastructure Bill Looking to Raise $30 Billion

Democrats prioritize spending, but the new infrastructure bill falls short on fully clarifying the language of crypto tax.

Vague Crypto Tax Rider

The new infrastructure bill emerging from the US Capitol could have enormous implications for the crypto industry. The bill’s language proposes massive increases in government spending and also contains an IRS tax provision for crypto intended to help fund the spending hike. 

The vague language of the bill appears to redefine the term “broker” to affect everything from software wallet developers, hardware wallet manufacturers, multisig service providers, liquidity providers, DAO token holders, and even miners. 

“This was hastily drafted and done without input from stakeholders,” Kristin Smith, Executive Director of the Blockchain Association, told CoinDesk TV on July 28th. “Folks in the industry and in Washington are looking to try and get this changed before the bill moves forward.” 

The bill faces scrutiny from members across crypto but is a priority for Democrats who control both chambers, the House of Representatives and the Senate as well as the White House. 

Source

The lawmakers still have a long way to go in understanding the intricacies in crypto. The tax provision expects to raise an estimated $28 billion from cryptocurrencies but the sheer volume of crypto requires that lawmakers in Congress get this right. 

“What happens is when [Congress] needs to find money quickly, they often tend to rush things without vetting them, without thinking them through,” Smith noted. “This isn’t good policymaking when you jam everything in last minute.

Poor Policy Making

Bills in Congress are very hard to change once they have hit the debate floor. Inability to clarify the language could have major unintended impacts down the line. 

According to Smith, there is still time to amend the bill before it hits the Senate floor. She indicated that her team is making all the contacts they can to help amend the bill. They will seek to implement process and lack of practical implementation arguments to get the necessary language changes. 

Source

The lack of clarity and understanding from lawmakers should be concerning to those in crypto, especially as lawmakers begin to legislate further and affect the industry. The changes are a priority for Smith before the August recess on Capitol Hill.

Related News