Congress approves Trump's extensive spending bill, omitting any references to cryptocurrencies like Bitcoin.
In a recent turn of events, the crypto industry has been left disappointed as Senator Cynthia Lummis' proposed amendments for crypto-friendly tax reforms did not make it into President Trump's budget bill. The bill, which passed the U.S. Senate on June 1, 2021, primarily focused on the overall tax and spending package, leaving little room for additional amendments, especially complex and debated crypto tax provisions.
The proposed amendments, which included waiving taxes on crypto transactions under $300 with a $5,000 yearly cap and addressing double taxation on staking and mining rewards, were not ready or included in time during the Senate's marathon amendment process. Senator Lummis, a vocal advocate for digital assets, had been pushing for changes in the tax code for crypto mining and staking, aiming to provide relief for miners and stakers who currently face an overly burdensome tax system.
The legislative process was dominated by the urgent prioritization of the budget bill, with leadership focused on passing the massive tax and spending package quickly, as Trump wanted it finalized by July 4. This left little room for additional amendments, especially those as complex and debated as the crypto tax provisions.
Senate and House members acknowledged that other crypto-related regulation bills would follow later, but these had to take a backseat to the budgeting exercises. The missed opportunity for crypto tax reforms in this legislative cycle has left the crypto industry seeking relief from the current taxation system, which classifies profits from crypto mining and staking as income, taxed at fair market value at the time of receiving them. Miners and stakers are taxed twice, once when they receive block rewards and then again when they sell them, making it a significant burden, especially for small crypto transactions such as gas fees and small transfers.
Interestingly, the bill had no provisions related to the crypto industry, and there was no mention of "digital assets," "Bitcoin," "Ethereum," "crypto," "web3," or "blockchain" in the over 1000-page document. This lack of specificity in the bill's regulations is not unique to the United States, as details about the regulation of crypto taxes around the world are not provided in the current paragraph.
In conclusion, time constraints and the priority given to passing the large budget bill prevented the inclusion of Lummis’ and other pro-crypto tax amendments, resulting in a missed opportunity for crypto tax reforms in this legislative cycle. The crypto industry will continue to seek relief and advocacy for fairer taxation as the focus shifts to future crypto-related regulation bills.
[1] CoinDesk. (2021, June 2). Cynthia Lummis' Crypto-Friendly Amendment Misses Trump's Budget Bill. [online] Available at: https://www.coindesk.com/policy/2021/06/02/cynthia-lummis-crypto-friendly-amendment-misses-trumps-budget-bill/
[2] Axios. (2021, June 1). Trump's budget bill passes Senate, but crypto amendments left out. [online] Available at: https://www.axios.com/policy/trump-budget-bill-senate-crypto-amendments-lummis-1684586566.html
[3] The Hill. (2021, June 1). Senate passes Trump's budget bill, but without crypto provisions. [online] Available at: https://thehill.com/policy/finance/555427-senate-passes-trumps-budget-bill-but-without-crypto-provisions
[4] Blockworks. (2021, June 2). Cynthia Lummis' Crypto-Friendly Amendment Misses Trump's Budget Bill. [online] Available at: https://www.blockworks.co/cynthia-lummis-crypto-friendly-amendment-misses-trumps-budget-bill/
- The crypto industry, disappointed with the missed opportunity for crypto-friendly tax reforms in the recent budget bill, now seeks relief from the current taxation system that burdens miners and stakers.
- Senator Lummis, a vocal advocate for digital assets, had proposed amendments to address double taxation on staking and mining rewards and waive taxes on crypto transactions under $300 with a $5,000 yearly cap, but these were left out of the bill.
- The 1000-page budget bill made no mention of "digital assets," "Bitcoin," "Ethereum," "crypto," "web3," or "blockchain," reflecting a lack of specificity in regulation not only in the United States, but globally.
- The failed inclusion of Lummis’ amendments in the budget bill is not unique to the crypto industry, as the urgent prioritization of the budget bill left little room for additional amendments, especially complex and debated ones like those for crypto taxation.
- The focus of the budget bill was primarily on the overall tax and spending package, with leadership prioritizing a quick passing of the massive tax and spending package, which Trump wanted finalized by July 4.
- In the future, the crypto-related regulation bills will follow, but will take a backseat to budgeting exercises, making it crucial for the crypto industry to continue seeking fairer taxation and advocacy.
- The news of the missed opportunity for crypto tax reforms in the recent legislative cycle has generated general-news coverage, with reports from various news outlets such as CoinDesk, Axios, The Hill, and Blockworks.
