U.S. President Joe Biden released his 2025 budget proposal on Monday featuring a number of provisions aimed at altering the cryptocurrency industry, including a wash sale rule for digital assets and an excise tax for crypto mining operations.
Biden’s Crypto Mining Tax and Crackdown on Wash Sales
If approved, Biden’s $7.3 trillion budget proposal would see the federal government crack down on crypto “wash sales,” wherein a cryptocurrency holder sells an asset at a loss “to reduce their tax burden” just to buy it back shortly thereafter.
The budget proposal states that it will eliminate the tax subsidy by “modernizing the tax code’s anti-abuse rules to apply to crypto assets just like they apply to stocks and other securities.”
“The Budget saves billions of dollars by closing other tax loopholes that overwhelmingly benefit the rich and the largest, most profitable corporations,” the proposal reads, including “closing a loophole that benefits wealthy crypto investors.”
Similarly, the proposed budget would implement a 30% excise tax corresponding to the cost of energy used by crypto mining firms, according to the U.S. Treasury Department’s annual “greenbook.”
“The increase in energy consumption attributable to the growth of digital asset mining has negative environmental effects and can have environmental justice implications as well as increase energy prices for those that share an electricity grid with digital asset miners,” the Treasury’s explanation states.
House Republicans Push Back On Budget Proposal
Biden’s 2025 budget faces an uphill battle as Congressional Republicans stand to oppose the proposal. The President attempted to close the wash sale loophole and implement a crypto mining tax in previous years to no avail.
“The price tag of President Biden’s proposed budget is yet another glaring reminder of this Administration’s insatiable appetite for reckless spending and the Democrats’ disregard for fiscal responsibility,” a statement released by Speaker of the House Mike Johnson (R-LA) alongside House Majority Whip Tom Emmer (R-MN), House Majority Leader Steve Scalise (R-LA), and Representative Elise Stefanik (R-NY) reads. “Biden’s budget doesn’t just miss the mark – it is a roadmap to accelerate America’s decline.”
My joint statement with @SteveScalise, @GOPMajorityWhip, and @RepStefanik on Biden’s budget proposal: pic.twitter.com/6StD9YAzMe
— Speaker Mike Johnson (@SpeakerJohnson) March 11, 2024
Political tensions between Democrats and Republicans continue to simmer as the 2024 presidential election heats up following Super Tuesday and Biden’s State of the Union Address last week.
Biden Versus Trump Rematch All But Confirmed
Republican frontrunner Donald Trump has come out seemingly in support of cryptocurrencies despite admitting he was “not a fan” previously, most recently revealing that his newly released sneaker line is accepting payments in bitcoin.
Meanwhile, Biden has pushed for regulatory guidance on the cryptocurrency industry, going so far as to issue an executive order on “ensuring the responsible development of cryptocurrency investments” in 2022.
The 2020 presidential candidates are seemingly poised to face off once again in November once both formally secure their party’s candidacy.
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