The Infrastructure Investment and Jobs Act would raise up to $28 billion by mandating the reporting of digital assets for tax purposes.
A provision of the 2,700-page, $1.2 trillion package — which is supported by Sen. Kyrsten Sinema (D-AZ), Sen. Mitt Romney (R-UT), and other members of the Senate from both parties — would amend the Internal Revenue Code by introducing a “return requirement for certain transfers of digital assets not otherwise subject to reporting.”
The provision defines “digital asset” as “any digital representation of value which is recorded on a cryptographically secured distributed ledger or any similar technology.”
As The New York Times explains:
The aim is to bring more transparency to an opaque sector, which critics argue is a haven for money laundering and tax evasion. But the provision also underscores the realization in Washington that the $2 trillion industry is here to stay and offers a new opportunity to generate federal tax revenue.
By strengthening tax enforcement on such digital assets, the federal government could raise $28 billion over a decade, according to an estimate by the Joint Committee on Taxation, which analyzed the plan. While that would be just a small fraction of the $550 billion that lawmakers have proposed in new federal spending on infrastructure, it is among the few fresh sources of revenue included in the plan.
CNBC reports that the Chamber of Digital Commerce believes the current provision is “too broad and vague.” Perianne Boring, the group’s president and founder, explained that “further clarifications are needed to ensure the digital asset ecosystem can continue to grow and flourish.”
The Daily Wire reported last week that lawmakers had addressed remaining disagreements in the Infrastructure Investment and Jobs Act — an alternative to President Biden’s $2.7 trillion American Jobs Plan. The compromise package removes spending on healthcare, education, and other items unrelated to physical infrastructure from the American Jobs Plan. In a statement supporting the newest version of the package, President Biden said that the bill would be passed “without raising taxes by one cent on people making less than $400,000 a year.”
The Infrastructure Investment and Jobs Act is not the first attempt to increase regulations on the nascent cryptocurrency sector. Last week, Rep. Don Beyer (D-VA) unveiled the Digital Asset Market Structure and Investor Protection Act, which would “protect consumers and promote innovation by incorporating digital assets into existing financial regulatory structures.”
The legislation would “create statutory definitions for digital assets and digital asset securities,” providing the Securities and Exchange Commission with authority over digital asset securities and the Commodity Futures Trading Commission with authority over digital assets.