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Also note that this crypto tax-reporting provision was slid into a huge bipartisan infrastructure deal. It really never should have been included in this legis

by cwkoss 5y ago

Also note that this crypto tax-reporting provision was slid into a huge bipartisan infrastructure deal. It really never should have been included in this legislation in the first place. Exempting actors in the crypto space who facillitate crypto usage without ever having custodial control of the funds makes a lot of sense. (Just like envelope manufacturers shouldn't have to register as money transmitters because people sometimes mail cash.) The provision that was slid in was nonsensically bad.

JumpCrisscross 5y ago
> this crypto tax provision was slid into a huge bipartisan infrastructure deal. It really never should have been included in this legislation in the first place. Why not? The infrastructure is being paid for in part by this tax. They're fundamentally linked.
- 3np 5y ago
  The biggest issues were less with the tax part and more with requirements around KYC, data gathering, and reporting.
- cwkoss 5y ago
  Updated my comment to clarify a bit: this wasn't a tax on crypto, it was about tax reporting requirements for certain actors in the crypto space. (Because Bitcoin is psuedonymous it would have effectively be impossible to comply - functionally it was a ban on crypto mining in the US) Even with the original language, this provision generates no revenue. It's only about data collection.
  - JumpCrisscross 5y ago
    > this provision generates no revenue. It's only about data collection. I would want to see an independent analysis of this claim. Increasing reporting requirements can generate revenue. There is a lot of unreported income. Given the culture around crypto, it isn't unreasonable to assume there is more of that going on there than baseline.
    - cwkoss 5y ago
      If the reporting requirement was implemented, yes it would provide the IRS with more data that could be used to catch tax evaders. However, they should be able to get nearly all of the information they need from the USD-BTC edges (exchanges). Effectively, I think what would have happened if this was enacted would be that all legitimate mining operations would move out of US, and the IRS still wouldn't get much data, just less tax revenue because those profits are no longer occurring on US soil by US entities.
- nybble41 5y ago
  > by this tax This isn't actually a (new) tax, it's a surveillance framework intended to support stricter enforcement of existing taxes. So far as that goes it's an added expense (mostly externalized) and not likely to pay for anything. The claim is that there is $28 billion of tax evasion going on which all this extra reporting would supposedly curtail–assuming all else remained equal—which is pure conjecture and not something that should be relied upon as a funding source.
- godelski 5y ago
  I think a lot of people, myself included, would like bills to be hyper focused and ban the use of riders. There are a few reasons for this. One is that it is easier to keep track from the public perspective. A title should reflect the contents of the bill (in this case it is not obvious that bitcoin regulations are part of infrastructure). This could help reduce confusion and manipulation. It helps with transparency because it reduces the cognitive load (Note we can still talk about a "plan" or "package" that is a group of bills and so many conversations would stay the same). The second part is that it helps reduce squabbling over nuance. A current bill might be 99% agreeable but that 1% is pretty contentious. If it was more compartmentalized then we could pass 99% of those things and get them in place faster rather than throwing the entire thing in the trash and restructuring (which often links back to the first point). This also reduces some of the toxic nature in politics where sometimes politicians add a component to nuke their own proposals so they can complain about it to their party's constituents. This can probably be improved upon a lot but I think highlights the frustration with how things are done today and people are looking for systematic changes to fix those problems.
  - spiralx 5y ago
    Without riders and earmarks there's no way to get someone to support your bill if they don't like the concept to start with. There's no downside for not supporting a bill, so cutting half of its provisions will still half to vote against. Riders and earmarks allow politicians to secure minor wins that they can sell to their electorate as the reason for supporting a bill. And most of these things would simply never pass as standalone bills, being too small and local for Congress as a whole, and too expensive or cross-jurisdictional for state governments.
    - godelski 5y ago
      > Without riders and earmarks there's no way to get someone to support your bill if they don't like the concept to start with. Why is this a problem? I see it as easier to call out politicians in public. Prevent the problems that are essentially: "Despite the 'Puppy and Sunshine' bill actually providing everyone with puppies and sunshine, we can't support it because it also summons the literal anti-christ to destroy the Earth. The puppies and sunshine is simply a trick to summon the anti-christ." IMO doing so makes the bill far more transparent _to the public_. > Riders and earmarks allow politicians to secure minor wins that they can sell to their electorate as the reason for supporting a bill. I do not understand why such a thing could not happen without these nor with packages (as defined above). > And most of these things would simply never pass as standalone bills Do you not see that as a problem?
- robbedpeter 5y ago
  These type of riders in must-pass omnibus bills are abominations.

by cwkoss 5y ago

JumpCrisscross 5y ago

> this crypto tax provision was slid into a huge bipartisan infrastructure deal. It really never should have been included in this legislation in the first place. Why not? The infrastructure is being paid for in part by this tax. They're fundamentally linked.

3np 5y ago
The biggest issues were less with the tax part and more with requirements around KYC, data gathering, and reporting.
cwkoss 5y ago
Updated my comment to clarify a bit: this wasn't a tax on crypto, it was about tax reporting requirements for certain actors in the crypto space. (Because Bitcoin is psuedonymous it would have effectively be impossible to comply - functionally it was a ban on crypto mining in the US) Even with the original language, this provision generates no revenue. It's only about data collection.
- JumpCrisscross 5y ago
  > this provision generates no revenue. It's only about data collection. I would want to see an independent analysis of this claim. Increasing reporting requirements can generate revenue. There is a lot of unreported income. Given the culture around crypto, it isn't unreasonable to assume there is more of that going on there than baseline.
  - cwkoss 5y ago
    If the reporting requirement was implemented, yes it would provide the IRS with more data that could be used to catch tax evaders. However, they should be able to get nearly all of the information they need from the USD-BTC edges (exchanges). Effectively, I think what would have happened if this was enacted would be that all legitimate mining operations would move out of US, and the IRS still wouldn't get much data, just less tax revenue because those profits are no longer occurring on US soil by US entities.
nybble41 5y ago
> by this tax This isn't actually a (new) tax, it's a surveillance framework intended to support stricter enforcement of existing taxes. So far as that goes it's an added expense (mostly externalized) and not likely to pay for anything. The claim is that there is $28 billion of tax evasion going on which all this extra reporting would supposedly curtail–assuming all else remained equal—which is pure conjecture and not something that should be relied upon as a funding source.
godelski 5y ago
I think a lot of people, myself included, would like bills to be hyper focused and ban the use of riders. There are a few reasons for this. One is that it is easier to keep track from the public perspective. A title should reflect the contents of the bill (in this case it is not obvious that bitcoin regulations are part of infrastructure). This could help reduce confusion and manipulation. It helps with transparency because it reduces the cognitive load (Note we can still talk about a "plan" or "package" that is a group of bills and so many conversations would stay the same). The second part is that it helps reduce squabbling over nuance. A current bill might be 99% agreeable but that 1% is pretty contentious. If it was more compartmentalized then we could pass 99% of those things and get them in place faster rather than throwing the entire thing in the trash and restructuring (which often links back to the first point). This also reduces some of the toxic nature in politics where sometimes politicians add a component to nuke their own proposals so they can complain about it to their party's constituents. This can probably be improved upon a lot but I think highlights the frustration with how things are done today and people are looking for systematic changes to fix those problems.
- spiralx 5y ago
  Without riders and earmarks there's no way to get someone to support your bill if they don't like the concept to start with. There's no downside for not supporting a bill, so cutting half of its provisions will still half to vote against. Riders and earmarks allow politicians to secure minor wins that they can sell to their electorate as the reason for supporting a bill. And most of these things would simply never pass as standalone bills, being too small and local for Congress as a whole, and too expensive or cross-jurisdictional for state governments.
  - godelski 5y ago
    > Without riders and earmarks there's no way to get someone to support your bill if they don't like the concept to start with. Why is this a problem? I see it as easier to call out politicians in public. Prevent the problems that are essentially: "Despite the 'Puppy and Sunshine' bill actually providing everyone with puppies and sunshine, we can't support it because it also summons the literal anti-christ to destroy the Earth. The puppies and sunshine is simply a trick to summon the anti-christ." IMO doing so makes the bill far more transparent _to the public_. > Riders and earmarks allow politicians to secure minor wins that they can sell to their electorate as the reason for supporting a bill. I do not understand why such a thing could not happen without these nor with packages (as defined above). > And most of these things would simply never pass as standalone bills Do you not see that as a problem?
robbedpeter 5y ago
These type of riders in must-pass omnibus bills are abominations.