Senate Debates Crypto Tax Amendments in Trump Bill

Senators in the US are engaged in a marathon session of voting on amendments to President Donald Trump’s comprehensive tax and spending bill, with discussions potentially extending into the early hours of Tuesday. The bill, known as the One Big Beautiful Bill Act, has been under consideration for 17 hours at the time of publication, with lawmakers from both sides proposing hundreds of amendments. The House passed the bill in May with a narrow 215 to 214 vote, and the Republicans’ slim Senate majority means the outcome in the upper chamber could also be close.

One of the key amendments proposed by Republican Senator Cynthia Lummis aims to address the “unfair tax treatment” of cryptocurrencies. Lummis’ amendment seeks to waive taxes on crypto transactions under $300 with a $5,000 yearly total cap, including stablecoins. The amendment also includes provisions to exclude most crypto lending agreements from taxation and stipulates that crypto earned from airdrops, mining, and staking would not be taxable until sold. Additionally, the amendment would apply the 30-day wash sale rule to crypto, preventing the sale of a digital asset for a loss and its replacement with a similar asset within 30 days before or after the sale.

Earlier on Monday, the Senate rejected a Democrat-backed amendment that would have prohibited government officials and their families from owning or promoting a range of digital assets. The amendment, supported by Democratic Senators Jeff Merkley, Elizabeth Warren, and Jack Reed, aimed to ban the president, vice president, members of Congress, and other government officials from engaging in cryptocurrency activities. This ban would have extended to the spouses and children of these officials, as well as former special government employees for up to one year after their role ends. Senator Lummis, among others, opposed the amendment, arguing that it would hinder American innovation and competitiveness.

Elon Musk, who has been critical of the bill, has reignited his feud with Trump by promising to form a new political party if the bill passes. Musk, who previously supported Trump’s campaign, has taken issue with the government spending allowance in the bill, which is estimated to add $3.3 trillion to the national debt over the next 10 years. Musk has described the bill as a “disgusting abomination” and has threatened to unseat any lawmakers who support it. He has also vowed to form the America Party if the bill becomes law, stating that the country needs an alternative to the current two-party system.