The much-criticized crypto tax introduced with the $1 trillion bipartisan infrastructure bill has become a matter of limelight. Two camps of the U.S. Senators have been formed which are for and against the bill.
The criticism surrounds having an unclear definition and the fact that it includes all stakeholders in the crypto economy including miners, and wallet providers. After much criticism, Senators Mark Warner and Rob Portman proposed a “last-minute amendment” to the bipartisan infrastructure bill.
The amendment excludes proof-of-mining and providers of hardware and software wallets. However, it still includes proof-of-stake validators and other crypto providers who will be subject to taxation.
Wow. Sen. Warner and Portman are proposing a last minute amendment competing with the Wyden-Lummis-Toomey amendment. It is a disastrous. It only excludes proof-of-work mining. And it does nothing for software devs. Ridiculous!
Here is all it excludes: pic.twitter.com/FA7K6NU2s0
— Jerry Brito (@jerrybrito) August 5, 2021
Now the news is that the White House is officially supporting this amendment. Crypto proponents have said that such an arrangement is absolutely “unworkable”. Angel investors and entrepreneur has lashed out at the bill stating:
Make no mistake, this is a backdoor Bitcoin ban. Compliance is impossible. Their intent is to criminalize full nodes, lightning nodes, and most Bitcoin wallets. And they are not really in favor of proof-of-work; the very next bill will include some ESG thing to attack that too.
Is America Following the China Way?
Over the last two months, China has initiated a strict crackdown outlawing Bitcoin and all crypto-related activities in the country. Analysts are saying that this will severely discourage crypto players from staying in America who will then look at moving to other places.
Senators Cynthia Lummis, Pat Toomey, and Ron Wyden who are in the opposite camp have proposed a rival amendment that contains a broad list of exemptions consisting of entities like “validating distributed ledger transactions,” entities “developing digital assets or their corresponding protocols” along with miners. Wyoming Senator Cynthia Lummis also confirmed the same n her recent tweet:
Do what you say you’re going to do. Our amendment protects miners as well as hardware and software developers. The other does not. The choice is clear. https://t.co/111GtGz7C0
— Senator Cynthia Lummis (@SenLummis) August 6, 2021
Senator Toomey also tweeted: “By clarifying the definition of broker, our amendment will ensure non-financial intermediaries like miners, network validators and other service providers are not subject to the reporting requirements specified in the bipartisan infrastructure package”.