The crypto tax provisions contained in the U.S. infrastructure bill affect the interests of 60 million Americans who own them. This is the view of Coinbase’s vice president of taxes, Lawrence Zlatkin.
I’m highlighting our reasonable and modest suggestions to move the crypto tax discussion forward. https://t.co/zMYnTlKSdo
— Lawrence J. Zlatkin (@LawrenceZlatkin) August 22, 2021
The executive criticized the lack of public discussion of the bill. He was outraged by the fact that crypto investors are being asked to raise $28 billion over ten years, while the tax gap for this period is estimated at $1 trillion.
«About 60 million Americans (roughly one in five) have invested in cryptocurrencies. They and the ecosystem as a whole deserve more respect than the last-minute provisions added», Zlatkin said.
“Overly burdensome and unworkable regulation,” he said, has sparked public outcry. In just a few days, almost 80,000 people — from public-interest groups to ordinary citizens — tried to reach out to the senators, a Coinbase spokesperson said.
Crypto investors expressed disagreement with the definition of ‘broker’ in the document. Not only exchanges or marketplaces, but miners, validators and wallet developers fall into this category. In its current form the bill would require them to report crypto transactions.
«The letter of the law dictates that ‘brokers’ must do the impossible. There won’t be a lawyer who would advise not to violate the norms, the non-compliance of which could lead to bankruptcy. This is a blow to innovation and a restriction on the technology’s potential at its earliest development stages […]. Tax policy must be well thought out. This is a regulatory misstep», Zlatkin stressed.
He presented proposals for lawmakers:
- bring digital-asset brokers in line with traditional brokers. If lawmakers want to broaden this concept on an infrastructure basis, they should define them as “organizations acting as intermediaries for client commissions with counterparties”;
- develop parameters for reporting tax information in crypto transactions. Industry participants are ready to engage in a substantive discussion on this topic;
- hold hearings in Congress on tax oversight concerning digital assets;
- shift lawmakers’ focus away from non-existent problems. Otherwise the United States will lose its leadership, and tax revenues could migrate offshore, as could the industry itself.
In conclusion Zlatkin thanked a number of senators who tried to soften the unfavourable amendments in the infrastructure bill.
Earlier, the document was criticized by prominent crypto lawyers and lobbying groups. The campaign was also joined by Elon Musk and Jack Dorsey.
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