On Thursday, U.S. Vice President Joseph Biden revealed his official 2024 budget proposal, which targets crypto transactions.
Among his other recommendations is the imposition of the same wash sale laws on cryptocurrencies as on stocks and bonds and an increase in capital gains taxes for the wealthiest Americans.
According to the White House, the proposal would help reduce budget deficits by $3 trillion over the next decade via a combination of company tax increases and government expenditure cutbacks, despite a higher-than-anticipated $835 billion military budget.
Among the administration’s tax goals is increasing stock buyback taxes from 1% to 4%. Anyone earning more than $1 million annually will be taxed capital gains at the same rate as wage income.
The proposal would also address the “like-kind exchange” loophole, which allows crypto traders to sell their underwater crypto assets, claim a tax-deductible loss, and buy their tokens instantly. The Wall Street Journal estimates this may generate $24 billion for the government.
The budget attempts to undo many of the tax reforms enacted by the Trump administration, which reduced effective tax rates for companies to below 10%.
Biden added, “The Budget would put the corporation tax rate at 28%, significantly below the 35% rate that existed previous to the 2017 tax bill.” This tax rate shift is accompanied by further recommendations to encourage job creation and investment in the United States and guarantee that major firms pay their fair share.
The President is committed to avoiding adopting any tax changes that will hurt those earning less than $400,000 annually.
The government claims its plan would stabilize the budget deficit at around 5% of GDP, compared to 6% without the President’s initiatives. Last month, Vice President Mike Pence of the Trump administration said that recurrent deficits placed the United States on track for a financial catastrophe in the coming decades.
In 2021, Biden’s infrastructure plan included a contentious provision to increase tax reporting requirements for cryptocurrency “brokers,” a term with a broad meaning that could potentially include miners, validators, and developers. Sens. Pat Toomey and Cynthia Lummis, among others, have pledged to have this wording altered later.
Lummis also proposed exempting Bitcoin transactions of less than $200 from capital gains taxes in the proposed law to facilitate Bitcoin’s usage as a currency.
Disclaimer: The information provided in this article is for informational purposes only and should not be construed as financial or investment advice. Cryptocurrency investments are subject to market risks, and individuals should seek professional advice before making any investment decisions.