Regulation
Joe Biden Proposes New Cryptocurrency Regulation, Including Mining Tax and ‘Wash Sale Rule’
That of President Joe Biden budget proposal for fiscal year 2025, released this week, covers nearly every area of the American economy. Some of the biggest items detailed in the budget revolve around new taxes and regulations on cryptocurrencies.
In terms of new taxes, the Biden administration has unveiled plans for an excise tax on cryptocurrency mining.
“Any company that uses computing resources, whether owned by the company or leased from others, to mine digital assets would be subject to an excise tax equal to 30% of the costs of electricity used in mining digital assets.”
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If the excise tax were passed, miners would have to declare how much electricity they use and then be taxed on that electricity. This tax would be in addition to the profit on the sale of goods that miners pay when they sell their tokens. The tax would be spread over three years, with the first year taxed at 10%, the second year at 20%, and the full realization of the 30% tax in the third year.
“Increased energy consumption attributable to the growth of digital asset mining has negative environmental effects and may have environmental justice implications, as well as increase energy prices for those who share an electricity grid with digital asset miners” , second the treasure Department. “Digital asset extraction also creates uncertainty and risks for public services and local communities, as extraction activity is highly variable and highly mobile.”
The White House projects the tax could bring in $302 million in the first full year and $7.7 billion over the next decade.
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The report also mentions a proposed new role for wash tradea form of market manipulation that usually involves the buying and selling of large quantities of an asset in a short time, usually for tax loss harvesting purposes.
“The budget eliminates this tax subsidy for cryptocurrencies by modernizing the tax code’s anti-abuse rules to apply to cryptocurrencies just as they apply to stocks and other securities.” the White House said.
The proposal would ensure that the tax benefits of wash trading are realized only if the asset is sold and not repurchased within 30 days. This would encourage some not to take part in wash trading and would increase tax revenue for those who continue to wash trade.
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The Biden administration expects the new rule to bring in nearly $26 billion in revenue over the next decade.
The proposed budget received strong opposition from Republicans. House Speaker Mike Johnson (R-LA) She said, “The price tag of President Biden’s proposed budget is yet another glaring reminder of this administration’s insatiable appetite for reckless spending and Democrats’ contempt for fiscal responsibility. Biden’s budget doesn’t just miss the mark: It’s a roadmap to accelerate America’s decline. “
The budget is one of the most controversial issues in politics and often requires numerous revisions before being approved. There is a possibility that some cryptocurrency regulations will be removed from Biden’s budget proposal. Nothing is certain until the final budget is approved.
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This article Joe Biden Proposes New Cryptocurrency Regulation, Including Mining Tax and ‘Wash Sale Rule’ originally appeared on Benzinga.com
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