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US government is backing minor changes to crypto tax proposal : Report

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Pavan A Follow

INDIA

Aug, 10 2021

Aug, 10 2021

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In a statement made late Thursday, the White House has backed the last-minute amendment for small changes to the tax proposal.

 

The statement "to clarify the measure to reduce tax evasion in the digital currency market," was given by White House deputy press secretary Andrew Bates, who says that "US government believes tax compliance will strengthen the finance sector and will ensure high-income taxpayers are contributing." 

 

He adds, “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, and Sinema strikes the right balance and makes an important step forward in promoting tax compliance.” 

 

On Thursday, Senators Mark Warner and Rob Portman proposed a final minute modification to the infrastructure deal that would provide an exemption from the tax, thereby favoring bitcoin (Proof-of-work) over others. Proof-of-stake (PoS) validators and crypto developers would still be subjected to tax reporting obligations.

 

The crypto community is rallying against this amendment, describing it as “impractical". Many have expressed concern over the strict reporting needed for software developers and validators. 

 

Jeff Stein, Washington Post economics reporter, tweeted, "White House is coming out formally to support Warner-Portman-Sinema crypto amendment, implicitly against the Toomey-Wyden-Lummis plan."

 

The amendment comes when the U.S. infrastructure plan is in progress and a bipartisan infrastructure bill in the US Senate will be passed in a few days. To pay for the various infrastructure projects like roads and bridges, the Senators have explained in the Congress on raising the funds through tax from crypto transactions and new reporting requirements for crypto brokers. 

 

For the infrastructure plan, it is estimated to raise $28 billion, which the crypto community opposes, with enthusiasts vowing to challenge the law in court if the amendment is passed.

 

An online petition slamming the law was posted on FightForTheFuture.org following the widespread condemnation. The petition has asked support from the citizens to stop the amendment from getting implemented.The vote for the amendment will be this week.


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Pavan A

CBW - External Analyst

INDIA

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