The Biden administration thinks the U.S. Congress should “cut tax loopholes that help wealthy crypto investors.” In a tweet posted this Tuesday, U.S. President Joe Biden criticized “MAGA Republicans” who, according to him, think the Congress should cut food safety inspections.
Instead, the tweet reads, Congress should go after the “tax loopholes”, as that would save $18 billion. While the President mentioned the tax loopholes, he did not elaborate on what these were or how they help crypto investors get rich.
Virtual currency is treated as property and general tax principles applicable to property transactions apply to transactions using virtual currency. When investors sell virtual currency, they must pay tax on any capital gain. There is no evidence of ‘Loopholes’ to avoid this.
Twitter notes said.
The tweet didn’t resonate favorably with the crypto community, as one might have expected. For instance, David Lawant, the head of research at FalconX, shared some stats from the Pew Research Center, where it’s stated that only 17% of U.S. adults ever traded, invested, or used cryptocurrencies.
Others, like Pierre Rochard, the VP of Research at Riot Platforms, weren’t so sure about the mentioned safety inspections.
Crypto Market Regulations
This isn’t the first time that the POTUS mentioned the crypto market and possible regulations. Back in March, the Biden administration’s “early draft” of the budget plan suggested changes to cryptocurrency tax treatments that would allow the government to raise $24 billion. Crypto sales don’t have the same rules that investors in other areas have, like stocks or bonds, and the proposed budget plan aims to change that.
Furthermore, at the beginning of last week, the administration proposed a “DAME Tax”, which basically translates to a 30% crypto mining tax, in order to combat its effect on the environment. “After a phase-in period, firms would face a tax equal to 30 percent of the cost of the electricity they use in crypto mining.” is stated in the report.
The White House generally feels that crypto assets have no fundamental value and that the U.S. dollar is widely accepted as a medium of exchange, something that crypto can’t replicate.
