Some US Lawmakers are pushing to exempt miners of Bitcoin from proposed new tax policy, citing severe implications for the crypto space in the country.
The United States has called for caution regarding implementing a proposed tax policy that could have significant implications for America’s crypto space. The US government has been proposing an expanded tax regime that would involve stricter reporting for miners and the crypto space in general with hope of raising additional $28 in extra funding for the government.
The concept of closer scrutiny on tax reporting didn’t go down well with Senator Patrick Toomey who pointed out that the sweeping action may have adverse effects on the progress of the US cryptocurrency space. The senator highlighted that the wordings of the proposed tax regime may create the basis for broader crackdown on the industry,
According to a report by the Washington Post, the effect could be that other industry participants such as miners, developers and blockchain projects could be targeted along with exchanges and other cryptocurrency businesses.
The concern of the senator and others is that the new policy’s wordings may push for more punitive actions on the industry in the US at the expense of the potential innovations of the industry.
Rob Portman, the senator behind the draft however is of the opinion that the new regime was not meant to target miners and software developers and have continued to allay fears concerning the proposed tax policy.
A representative of Senator Portman stated that
“This legislative language does not […] force non-brokers, such as software developers and crypto miners, to comply with IRS reporting obligations.”
With the exodus of many miners from China, the need to protect US based mining has come to the fore. Marathon, the mining association of the US plans to increase capacity to 13.3 exahashes per second by Q2 of 2022. This is 12 percent of the current Bitcoin network hashrate.
Photo Credit: Senate.gov