Congress passes infrastructure bills of around $1.2 trillion with crypto tax
President Joe Biden has signed into law the $1.2 trillion bipartisan infrastructure bill which would include new provisions related to crypto-tax reporting for all citizens. Upon approval of the new infrastructure bill, the IRS will have the ability to raise an additional $28 billion by taxing crypto.
By a vote of 228 to 206, the House passed President Biden's controversial infrastructure bill. The plan was initially passed in August but was blocked in the House as Democrats attempted to reach an agreement on a separate $1.9 trillion economic package, which many Democrats had linked to the outcome of the infrastructure bill.
Over the next five years, the package passed Friday night will provide $550 billion in additional federal infrastructure expenditures, including money for roads, bridges, mass transit, ports, airports, rail, and waterways. The law contains a $65 billion investment in strengthening the country's broadband infrastructure, as well as tens of billions in improving the electric grid and water systems. As part of the bill, an additional $7.5 billion would be spent to build a nationwide network of EV chargers.
In the new infrastructure bill, crypto developers, node operators, and transaction validators will be treated similarly to financial institution brokers.
Furthermore, there is also a concern in the crypto community about a vague definition of the term "broker" that could result in unreasonably strict tax reporting requirements for subcommunities like miners. The inability to disclose crypto-related earnings will result in tax evasion and felony charges.
Meeting stricter reporting requirements is impossible due to the decentralized anonymity of a large portion of the crypto-verse.
Brokers will be required to file 1099 forms giving their customers' names and addresses. The government is expected to be able to raise an additional $28 billion in taxes as a result of the proposed reporting requirements.
CBW - External Analyst