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U.S. Treasury Secretary Janet Yellen has reportedly raised objections with lawmakers over changing the cryptocurrency tax to the $ 1,000 billion infrastructure bill backed by the crypto community. The White House subsequently announced its support for a competing amendment.
Yellen Wields Influence on Crypto Tax Lawmakers
The new crypto tax proposal in the $ 1,000 billion infrastructure bill has become a hot topic of controversy over the past week.
Two amendments have been proposed so far: one sponsored by Senators Mark Warner, Rob Portman and Kyrsten Sinema. The other, which has garnered support from the crypto community, is sponsored by Senators Ron Wyden, Cynthia Lummis, and Pat Toomey.
According to Washington Post reporter Jeff Stein, Treasury Secretary Janet Yellen spoke to lawmakers on Thursday to raise objections to the amendment sponsored by Senators Toomey, Wyden and Lummis. It tweeted Friday, citing sources familiar with the matter:
Treasury Secretary Janet Yellen has privately lobbied lawmakers against the Wyden-Lummis-Toomey crypto amendment, as the White House seeks to push back pressure to limit new regulators.
The cryptocurrency tax proposal in the infrastructure bill has two key parts. The first requires that payments over $ 10,000 be reported to the Internal Revenue Service (IRS). The second requires crypto “brokers” to file a type of Form 1099 for certain types of crypto transactions.
The definition of what a crypto broker is in the original proposal includes miners and software developers. This caused an uproar in the crypto community as miners and software developers don’t know who their users are, making it impossible to report to the IRS. Some lawmakers criticized the original proposal, including Senator Pat Toomey, who said the plan was “unworkable”. The two changes aim to clarify the definition of broker.
The crypto industry believes that the Wyden-Lummis-Toomey Amendment adequately clarifies what a broker is.
In contrast, the Warner-Portman-Sinema crypto amendment only exempts the mining of proof of work, raising more concerns that the government is now picking the winners and losers of innovation. Nonetheless, this amendment won the support of the White House.
The initial crypto tax plan was developed by Senator Portman with the help of officials from the Treasury Department. It is expected to raise around $ 28 billion over 10 years from crypto transactions to help fund the infrastructure package.
Treasury Secretary Yellen has repeatedly expressed concerns about the use of cryptocurrencies in illicit financing. She warned in February: “As far as it is used, I fear that it is often for illicit financing. It is an extremely inefficient way to conduct transactions, and the amount of energy consumed to process these transactions is staggering.
What do you think of Treasury Secretary Yellen’s lobbying against the amendment supported by the crypto community? Let us know in the comments section below.
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