In a major negative news for crypto-enthusiasts and developers in the United States, the U.S. Senate has passed the draconian-for-crypto $1 trillion Infrastructure Bill on Aug 10, 2021. It will now be presented in the U.S. House of Representatives. The problem lies in the tax reporting requirements and who is required to file taxes clauses of the Infrastructure Bill, it uses a clause which erroneously defines the word “broker” to include all validators, miners and node runners on all blockchain platforms.
As such, it isn’t possible to comply, because those entities have no control over the tx and it’s not possible for them to keep identity records to provide / file tax returns on etc. U.S. The Infrastructure Bill has been warned by different segments as being detrimental to the crypto and blockchain talent and progress in the United States by forcing them to move outside the U.S. because of impractical compliance requirements, if they want to continue working in the field.
The Infrastructure Bill seeks to generate $28 billion in crypto related taxes to upgrade roads, rail, grid, water, broadband etc. There were multiple amendments presented for rectifying the erroneous interpretation of the word “broker”, however unfortunately, a political consensus couldn’t be reached, despite several Senators warning that the Infrastructure Bill stands to erode American dominance in the financial services and innovation sector.
It will hinder creation of trillions of dollars of value and jobs in the United States. The Infrastructure Bill is likely to pass through the House of Representatives also. However, every cloud has a silver lining and the recent political drama has given rise to the massive mobilizing and highly motivated crypto community. It has shown that they are a powerful political force to be reckoned with and have come far in their just over a decade old journey.
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