U.S. Senator for Pennsylvania Pat Toomey has openly shared his distraughtness over a controversial bi-partisan infrastructure package that specifies new taxation guidelines for cryptocurrency investors. Notably, the bill plans to impose on cryptocurrencies the same tax reporting rules associated with stocks and other kinds of securities.
The yet-to-be bill will create more tax revenue for the government, but will also inhibit the privacy of cryptocurrency investors and other entities by requiring brokers to collect information such as the amount paid for the purchase of cryptocurrencies.
Pat Toomey has joined the growing list of lawmakers kicking against the proposed regulation. The Senator published his thoughts on the bill in an update on his official website, labeling it “hastily-designed.” He wrote:
Congress should not rush forward with this hastily-designed tax reporting regime for cryptocurrency, especially without a full understanding of the consequences.
The lawmaker noted the primary concern for cryptocurrency industry participants, namely, the “overly broad definition of broker.”
“By including an overly broad definition of broker, the current provision sweeps in non-financial intermediaries like miners, network validators, and other service providers. Moreover, these individuals never take control of a consumer’s assets and don’t even have the personal-identifying information needed to file a 1099 with the IRS,” the Senator wrote.
He then described the text as “unworkable” and disclosed that he planned to offer an amendment to fix it.
Earlier in the day, Senate Finance Chair Ron Wyden also expressed discontent with the newly proposed rules. While admitting to himself that Americans are using cryptocurrency to minimize taxation, he said that the proposed rules are not a solution.
“The Republican provision in the bipartisan infrastructure framework isn’t close to being that solution. It’s an attempt to apply brick and mortar rules to the internet and fails to understand how the technology works,” Chair Ron Wyden reportedly said.
Senators are set to initiate the process of making amendments to the bill this Monday, with the target being to pass the bill before the August recess.
The cryptocurrency industry has been subject to a lot of regulatory discussions in recent times. Last month, the U.S. Treasury held a meeting discussing the role of stablecoins and new rules for companies that issue them.