In a move that could shake the crypto world, President Joe Biden is reportedly proposing changes to cryptocurrency taxation in his upcoming budget plan. According to the Wall Street Journal, the proposed plan targets wash trading and aims to prevent investors from accepting a tax-deductible loss before reinvesting, an illegal practice that the government wants to put a stop to.
This proposal is projected to raise $24 billion and is part of Biden’s broader 2024 budget plan, which seeks to cut federal budget deficits by $3 trillion over a decade. However, the plan may face opposition from the Republican party, who currently hold a House majority despite the Democratic leadership of President Biden and the Senate.
The proposed changes to crypto taxation rules bear a striking resemblance to the policies implemented by President Franklin D. Roosevelt’s New Deal in the 1930s. The New Deal was a series of programs, public works projects, financial reforms, and regulations that aimed to provide relief, recovery, and reform during the Great Depression.
Similar to the New Deal, Biden’s proposed plan seeks to regulate and reform the financial system, particularly in the digital asset space. The changes aim to expand the scope of crypto tax rules, prevent illegal trading practices, and generate revenue for the government.
However, the proposed changes are not guaranteed to come into effect. Nevertheless, various other recent tax policy changes will affect crypto investors in the U.S. this tax season. The IRS has expanded the scope of crypto tax rules, requiring anyone who has dealt with digital assets to report their activities. Additionally, some cryptocurrency exchanges began providing 1099-B forms to their users in 2022, providing crypto investors with more information to report to the IRS.
While some crypto investors may be hesitant to comply with the new rules, it is essential to note that only 58% of surveyed investors included cryptocurrency on their tax reports in 2022. In today’s increasingly digital world, it is critical for investors to comply with new tax policies and regulations, which aim to foster a transparent and equitable financial system.
In conclusion, Biden’s proposed changes to crypto taxation rules are similar to the policies implemented by Roosevelt’s New Deal. Both seek to reform the financial system, prevent illegal practices, and generate revenue for the government. As crypto continues to gain momentum, investors must stay up to date with new tax policies and regulations, to ensure compliance with the law and promote a more equitable financial system.
