The source of funds for the trillions of new infrastructure projects in the United States has become a problem, and the taxation of cryptocurrencies has become a partial funding solution
The disagreement on the source of funding for the US trillion-dollar infrastructure plan is an important obstacle that hinders the US Congress to reach a consensus agreement. However, the two parties quickly reached an agreement on increasing the taxation of cryptocurrency transactions to raise part of the trillion-dollar infrastructure plan.
On the evening of July 28, after several weeks of negotiations in the U.S. Congress, the Senate’s procedural vote on the U.S. trillion-dollar infrastructure plan was released, with 67 votes in favor and 32 against, among which 17 Republicans and 50 voted in favor. Democrats. After the Senate, which is mainly controlled by Republicans, passes the bill, it then passes the House of Representatives, which is mainly controlled by Democrats, for deliberation. After the vote is passed, Biden can sign and finally pass the bill.
Although most of the details of the bill have been agreed, a small part has not yet been fully determined. Among them, the source of construction funds in the trillion-dollar infrastructure bill has always been the focus of the bill’s discussion. The Republican Party has always opposed the proposal by the White House to increase the tax rate to cover infrastructure investment.
In response, the two parties in the U.S. Senate unanimously passed a supplementary proposal on infrastructure, proposing to raise 28 billion US dollars in infrastructure funds through taxation of cryptocurrency transactions, including brokers, trading platforms (including centralization and decentralization) Digital asset trading brokers, including the trading platform), must submit tax declarations to the U.S. Internal Revenue Service through the revised information reporting system, mainly for transactions exceeding $10,000. As of the publication, Bitcoin is quoting $38,806 and Ethereum is quoting $2,348. Based on current prices, transactions between approximately 0.3 Bitcoin and 4 Ethereum require tax returns for tax payment.
Many people in the crypto industry expressed dissatisfaction with this, such as Kristin Smith, head of the Blockchain Association of Washington, an industry organization, Republican Senator Cynthia Lummis, and Shehan Chandrasekera, head of tax strategy at crypto tax company CoinTracker.
Senator Cynthia Lummis, Republican of Oming, said: “The cryptocurrency market is a very complex field, and it is prone to problems. It is necessary to set up a special committee to study cryptocurrency taxation issues, rather than urgently drafting.”
Shehan Chandrasekera, head of tax strategy at crypto tax company CoinTracker, even pointed out that the new filing requirements are quite difficult to implement, and it is difficult for legislators to try to place traditional stocks and securities practices in the cryptocurrency field. He emphasized: “In the process of investing in cryptocurrency, most people will keep their assets in a hard wallet, which is completely different from the traditional financial sector.”
However, in May of this year, the United States also mentioned a similar proposal on the taxation of cryptocurrencies. The report on tax enforcement recommendations submitted by the U.S. Treasury Department mentioned that additional measures are required for crypto assets to reduce the transfer of revenue. The opportunity of a new information reporting system, cash transactions of more than $10,000 have been subject to reporting requirements.
Prior to this, the United States has repeatedly proposed to levy taxes on cryptocurrency transactions. In November 2020, the U.S. Internal Revenue Service (IRS) issued a guidance note on the draft No. 1040 “U.S. Individual Income Tax Return”. If taxpayers receive any cryptocurrency for free, including airdrops or hard forks, they must check the “Yes” option in the encryption-related questions. In 2014, the U.S. Revenue Service IRS issued the first version of its guidelines on the taxation of cryptocurrencies. In 2019, the IRS revised it appropriately. According to existing policies, holders of cryptocurrency transactions are subject to capital gains tax.
According to the statistics of our reporter, the current situation of the need to pay taxes on cryptocurrency transactions in the United States is that the cryptocurrencies obtained through mining are counted as ordinary income and need to pay other income taxes; in addition, the cryptocurrency is converted into legal currency and encrypted Exchange currencies into other cryptocurrencies, use cryptocurrencies to purchase goods or services, and obtain free cryptocurrencies through airdrops or rewards. U.S. cryptocurrency holders must record their trading activities and gains/losses, fill in and submit Form8949 to the IRS for registration.
Posted by:CoinYuppie，Reprinted with attribution to:https://coinyuppie.com/the-source-of-funds-for-the-trillions-of-new-infrastructure-projects-in-the-united-states-has-become-a-problem-and-the-taxation-of-cryptocurrencies-has-become-a-partial-funding-solution/
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