At the end of September, House legislators will vote on a $1 trillion infrastructure plan, which includes a contentious crypto tax proposal that has sparked heated debate on Capitol Hill. While there is bipartisan support for modifying the provision, no revisions appear to be adopted.
The essence of the argument – at least as far as the crypto industry is concerned – is how the infrastructure bill defines “broker” in a pay-for clause that relies on an expanded crypto tax provision to raise $28 billion over ten years.
Critics claim that the provision’s definition of a “broker” is extremely broad and might be interpreted to encompass miners, node validators, and developers. There is also concern that the provision will increase surveillance of cryptocurrency users and make it difficult for crypto firms to operate in the US.
A bipartisan group of crypto-friendly Senators hurried to present a bill amendment that would exempt developers, validators, and miners from the reporting obligation. The amendment required unanimous assent to pass and was stymied by a single senator, Richard Shelby (R-Ala.), who attempted and failed to add $50 billion in additional military spending.
An increasing number of members of Congress have publicly announced their determination to oppose the cryptocurrency reporting provision in the infrastructure package.
A coalition of Silicon Valley Democrats, including Reps. Anna Eshoo (D-Calif.), Ro Khanna (D-Calif.), and Eric Swalwell (D-Calif.), have spoken out against the present provision and called for an amendment to correct the “problematic” definition of “broker.”
The nonpartisan Congressional Blockchain Caucus, led by Rep. Tom Emmer (R-Minn.), issued a letter to Congress earlier this month requesting an amendment to update the “dangerous” pay-for provision.
Rep. Emmer said in a statement to CoinDesk, “Congress cannot cross-jurisdictionally try to pay for an infrastructure bill on the backs of our crypto business through legislation that was slapped together with little to no thought for the crypto industry.”
Reps. Patrick McHenry (R-NC) and Byron Donalds (R-FL) have joined the bipartisan fight, calling the clause “hurriedly drafted” and “burdensome” for the Bitcoin business. Donalds’ spokeswoman stated that he intends to vote against the bill.