MCS | Infra Bill is Coming

MCS | Infra Bill is Coming

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228 vs. 206.

The Infrastructure Bill has passed by the U.S. House of Representatives on November 6th with 228 votes.

If President Biden confirms this bill, the U.S. government can collect an additional $28 billion from taxing cryptocurrency.

The House vote was the last legislative process before submitting the bill to President Biden who introduced the bill, so it is obvious that he will sign the bill.

Read More: https://blog.mcs.io/mcs-u-s-senate-passed-the-infrastructure-bill/

What is the Infrastructure Bill?

The Infrastructure Bill (Infra Bill) is a bill to supplement the performance of facilities through investment in infrastructure and to solve the unemployment rate that has risen in the aftermath of COVID-19 through job creation.

Good for the Society

Economists say the bill will prepare the short-term economy and strong economic growth for decades to come.

Mark Zandi

Moody's Analytics economist Mark Zandi estimates that the bill will boost labor productivity growth by 0.03 percentage points per year through 2031. As a result, the economy could continue to grow at an annual rate of 1.93%, up from the 1.9% expected by the Congressional Budget Office.

Moody's expects the bill to increase U.S. production by 0.17 percent, or $34 billion, by the end of the year and 0.5 percent by the end of 2026. He also predicted that by the end of 2031, GDP (Gross Domestic Product) would be $39 billion (0.12%) higher than it would have been if the bill had not been passed.

The law is also expected to create a cumulative 566,000 jobs by 2026 (albeit temporarily), adding about a third of all U.S. employment.

Bad for Crypto Traders

The problem with this bill is that the provisions of the underlying law were poorly revised to tax centralized cryptocurrency exchanges such as Coinbase as 'brokers'. Some argue that it is unconstitutional.

When the bill goes into effect, cryptocurrency exchanges will be required to provide detailed personal information such as names, addresses, and social security numbers of investors to tax authorities.

Peter Van Valkenburgh

Peter Van Valkenburgh, head of the research team at Coin Center, said, “If it is a fiat currency transaction, the IRS will legally abide the reporting obligation because the bank is responsible for managing and supervising it as a third party. However, it is difficult to apply to the virtual asset market.”

He also said, “When conducting P2P-type cryptocurrency transactions, a warrant of execution is required according to the 4th Amendment to the National Tax Service in order to oblige the National Tax Service to report such transactions.”

The 4th Amendment stipulates that prior issuance of a court warrant is necessary for seizure and search by investigative agencies. The purpose of this is that law enforcement agencies should be strictly limited by warrants when they infringe on individual constitutional freedoms.

It is also controversial that cryptocurrency is considered as cash without any explanation for additional taxation on cryptocurrency transactions. Section 6050I of the National Tax Service Act is at the heart of the controversy.

The 8-word amendment in the new bill includes “any digital asset” in the definition of “cash.”

Meltem Demirors

Meltem Demirors, Chief Strategy Officer (CSO) of digital asset manager CoinShares, wrote on her Twitter account:

In addition, according to Section 6050I, violation of the duty to report cryptocurrency transactions is classified as a felony and criminally punished. If you make a mistake in reporting, you could go to jail! (in the worst-case scenario) There is also an opinion that the use of the same laws used in the 1980s when the United States waged war on drugs for taxation is also a problem.

Concerns and criticisms about the Infra Bill have been raised since the Senate voted in August, but criticism has grown stronger after the House of Representatives voted.

As mentioned earlier, President Joe Biden has also strongly pushed for the introduction of this bill and has persistently persuaded the Senate and House of Representatives, Republicans, and the progressives and centrists of the Democratic Party.

This "move" by the United States will certainly be left as a "precedent" that other governments can refer to.

Yes.

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