WSJ learns of Biden’s plans to change the taxation of cryptocurrencies

The measure should bring the US budget an additional $24 billion

09.03.2023 - 09:00

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What’s new? US President Joe Biden is scheduled to unveil his budget plan for the fiscal year 2024 on March 9, The Wall Street Journal reports. According to White House officials, Biden will present measures to save hundreds of billions of dollars by cutting spending he considers unsustainable. The president will reportedly propose tax changes for cryptocurrency transactions that would bring an additional $24 billion to the US budget.

The WSJ material

What else is known about Biden’s plans? Changes in the taxation of crypto transactions are designed to root out the practice of “wash trading.” However, the rules prohibiting wash trading apply to stock and bond trading and do not currently apply to cryptocurrency transactions.

Wash trading is the repeated buying and selling of the same asset over a short period of time in order to mislead other market participants about its price or liquidity. Using such a strategy, a trader can sell assets at a tax-exempt loss, then immediately buy them back.

Biden also proposes to increase the capital gains tax rate for investors earning at least $1 million. Thus, the taxation of long-term investments would be almost doubled, from 20% to 39,6%. He also plans to raise income taxes on corporations and wealthy Americans, Bloomberg reports.

Earlier, Biden’s former advisor Daleep Singh said that the government is actively working to promote the digital dollar in order to push private cryptocurrencies out of the market. He explained that such assets are used to implement fraudulent schemes and circumvent sanctions.

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