U.S. President Joe Biden’s 2024 budget plan has caused a stir in the cryptocurrency world. The plan includes proposals to subject crypto to the same wash sale rules as stocks and bonds, as well as raising capital gains taxes for the wealthiest Americans. The White House claims that the plan will help cut budget deficits over the coming decade by $3 trillion through an array of business tax hikes and government spending cuts.
One of the administration’s tax priorities is to quadruple taxes on stock buybacks from 1% to 4%. Capital gains will also be taxed at the same rate as wage income for those making over $1 million per year. The plan would also close the “like-kind exchange” loophole whereby crypto traders can avoid paying taxes on gains by swapping one cryptocurrency for another.
The move has been met with mixed reactions from the cryptocurrency community. Some argue that it is unfair to subject crypto to the same rules as traditional assets, while others believe that it is a necessary step towards legitimizing the industry.
Regardless of the opinions, it is clear that the Biden administration is taking a closer look at the cryptocurrency space. As the industry continues to grow and evolve, it is likely that we will see more regulations and policies aimed at bringing it in line with traditional finance.
