Musk threatens to form a new political party! "Big and beautiful" tax reform tears apart the US Congress

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07-01
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Author: Bright, Foresight News

Original Title: Does the "Big and Beautiful" Bill Ignite Controversy, and Will the Crypto Industry Get a Tax Cut?


On July 1, the U.S. Senate obtained enough votes in a procedural vote (51 votes in favor, 49 against) to advance the Trump administration's "One Big Beautiful Bill Act," which previously caused Musk, who had a falling out with Trump, to explode.

Musk directly tweeted, "If this crazy spending bill (the 'Big and Beautiful' Bill) passes, a new U.S. political party will be established the next day. Our country needs an alternative to the single Democratic-Republican party so that people truly have a voice." Afterwards, Musk consecutively retweeted posts criticizing the U.S.'s massive debt and commented on the fact of debt increases during Democratic and Republican administrations, saying, "They are just pretending to be two parties, but in reality, they are just one."

A previous online poll showed that over 80% of voters believe the U.S. needs a new political party.

In the early morning of July 1, Beijing time, the U.S. Senate obtained enough votes in a procedural vote (51 votes in favor, 49 against) to advance the Trump tax reform bill, increasing the likelihood of its passage in the coming days. The bill, named the "One Big Beautiful Bill Act" (OBBB Act), contains multiple provisions spanning over 1000 pages, primarily focusing on tax cuts and spending reductions.

The bill will extend the corporate and individual tax cuts passed by Trump during his first presidential term in 2017, provide new tax breaks for tips, auto loans, and other areas, raise the eligibility threshold for social welfare for low-income groups, significantly cut clean energy subsidies from Biden's Inflation Reduction Act (IRA), increase defense spending, and provide more funding to combat illegal immigration.

Can the "Big and Beautiful" Bill Make Crypto "Big and Beautiful"?

Beyond the debt ceiling dispute, Wyoming Republican Senator Cynthia Lummis is attempting to quietly incorporate an important cryptocurrency tax measure into Trump's massive budget bill, aiming to reduce tax burdens from basic cryptocurrency activities. Lummis proposed on Monday to include provisions in the congressional "Big Beautiful Bill" that would exempt small crypto transactions (below $300) from taxes.

The industry believes this would streamline the current practice of taxing crypto core activities—staking and digital asset mining—at both the beginning and end of activities.

The proposal also suggests setting an annual small transaction total cap at $5,000, significantly reducing the capital gains tax calculation burden for those making only small digital asset transactions. Currently, Lummis's amendment has not been voted on and involves tax issues related to crypto lending, wash trading, and charitable donations.

The industry believes this amendment will eliminate many potential users' hesitations about trying cryptocurrencies. In fact, just yesterday, the U.S. Supreme Court rejected Coinbase user James Harper's appeal against the IRS, refusing to hear his request to "protect user crypto transaction data from forced disclosure".

Once the amendment passes, investors' small transactions will be exempt from some tedious tax reporting procedures, and transaction data not involving large token purchases or sales will not need to be disclosed.

Additionally, Oregon Democratic Senator Jeff Merkley proposed an amendment to the "Big and Beautiful" Bill that would prohibit elected officials from promoting or profiting from crypto tokens in which they have a financial interest. Lummis strongly opposed this amendment, stating it would severely damage U.S. innovation and competitiveness and impair the government's ability to effectively understand and regulate digital assets. It appears that cryptocurrencies have become a fundamental economic source for the Republican Party.

Overall, the "Big and Beautiful" Bill is viewed by the market as the first step of the Trump administration's "water release," and Trump has once again urged Powell about rate cuts. In response, Goldman Sachs has moved its Federal Reserve rate cut expectation from December to September. Perhaps massive liquidity is about to arrive?

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Disclaimer: The content above is only the author's opinion which does not represent any position of Followin, and is not intended as, and shall not be understood or construed as, investment advice from Followin.
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