The biggest discussion in the crypto universe at present is around crypto taxation amendments in the US Infrastructure Bill. All eyes are set on the Senate vote scheduled to take place on Saturday that could potentially decide the fate of crypto businesses in the US. At a time when the Biden administration has endorsed the controversial crypto amendment proposed at the last minute, Elon Musk has a piece of sane advice for lawmakers, “there is no crisis that compels hasty legislation.”
Musk advocated that the crypto ecosystem is still in a nascent stage and this is not the correct time to pick winners and losers. His comments came in as a response to Coinbase CEO’s tweet about the disastrous last-minute amendment proposal that could decide which crypto foundational technologies are OK and which are not.
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
The US Infrastructure Bill estimated to be over $1 trillion has a crypto taxation provision that would implement a $28 billion tax burden on the crypto ecosystem. The bill once passed would require crypto “Brokers” to report tax liabilities to IRS.
The crypto community has taken exception to the definition of brokers in the bill which says software developers, node operators, miners, and several others fall in that bracket. These firms can not practically comply with crypto tax reporting obligations because they don’t have the requisite information to do so.
10/ Imposing crypto tax reporting obligations on software developers, node operators, miners, and others, who cannot comply with them, may very well push them to leave the United States for other jurisdictions. This is obviously bad for America.
— Cameron Winklevoss (@cameron) August 6, 2021
Last-Minute Amendment Could Lead to Migration of Crypto Businesses
After several calls for amendments to the flawed bill, there are two amendment proposals competing to be included in the Bill. The first proposal was made by Senators Ron Wyden, Cynthia Lummis, and Pat Toomey on Wednesday and is seen as a more inclusive one as it exempts Bitcoin miners, wallet developers, crypto validators, and protocol developers from tax reporting.
The second proposal made at the last minute was proposed by Sen. Rob Portman and Mark Warner that only excludes Proof-Of-Work validators and developers from the “impossible” tax reporting criteria. However, it has got the support of the White House and reportedly treasury secretary Janet Yellen is also lobbying for the bill. If it wins the Senate vote, many believe it would make Decentralized Finance (Defi) businesses move out of States.