Elon Musk, Among Others Criticizing Crypto Tax Rules

After a bipartisan Senate voted on President Joe Biden’s infrastructure package, a chorus of leaders from Washington and Silicon Valley increased attention about a provision that would add taxes on crypto.

On Saturday, Sen. Ted Cruz said that the infrastructure deal includes dangerous provisions that might devastate blockchain and crypto innovation.

However, Elon Musk called this legislation quick, saying that it was not the time for lawmakers to pick technology losers or winners.

Last week, a bipartisan Senate bill included different tax rules for crypto trading companies and brokers. Therefore this move should increase about $28 billion in current tax revenue in a decade. The White House commented that this revenue might be helpful for President Joe Biden to fund his infrastructure package.

Critics around the new rules

Critics said that the new tax rules might apply to a larger group of crypto companies. However, these companies include firms unable to meet the reporting requirements.

Lawmakers Senator Cynthia Lummis, Ron Wyden, and Pat Toomey introduced an order that would better define the word broker.

In a statement, Lummis said that the financial technology space and the digital asset seems complicated. Moreover, he added that they spent long hours working in the Senate to find a way to efficiently integrate digital assets into the tax code without harming innovation and technology.

Another correction was by Sens. Krysten Sinema, Mark Warner, and Rob Portman. The White House said it favoured the amendment, which excludes specific crypto investors from this new tax rule.

On Friday, the White House press secretary Jen Psaki stated in a press briefing that the alternative amendment by Portman, Senators Warner, and Sinema seems able to make the right balance. He added that it might make a significant step in promoting tax compliance.

Companies interested in crypto started to push back, stating that the amendments didn’t work enough to protect an industry.

A spokesperson for VC firm Andreessen Horowitz said that if the amendment introduced by Senator Warner passes, America will lose its position in the world of innovation.