Biden’s proposed $18b crypto tax leaves unanswered questions

The proposed loophole

In a recent statement, president Joe Biden criticized republican budget priorities and proposed that the government could gain $18 billion by eliminating “tax loopholes that help wealthy crypto investors.”

The statement has left the crypto industry perplexed, as many have denied the existence of such a loophole and are expressing confusion over the president’s claim.

The Biden administration’s budget proposal estimates that the closure of the wash sale loophole for digital assets could generate $23 billion in revenue over the next ten years, with a projected $1.24 billion in 2024.

However, president Biden’s recent tweet referring to an $18 billion figure has left many in the crypto industry confused. Some speculate that this number might be connected to the administration’s earlier plan to tax crypto transactions differently, which was expected to raise $24 billion. 

The Wall Street Journal reported on this proposal earlier this year, stating that the administration argued that crypto assets were not subject to the same wash trading rules as traditional securities like stocks and bonds.

One part of a larger discussion

The tweet was part of a broader discussion on the debt limit and potential budget cuts with congressional leaders. Biden expressed willingness to “cutting wasteful spending,” but he disagrees with many of the proposed reductions put forward by the GOP.

It’s worth noting that some republicans have developed closer ties with the crypto industry in recent years. The conservative Club for Growth, for instance, has launched two crypto-focused super PACs in the last election cycle.

Meanwhile, the White House has been active in developing and releasing a series of digital asset reports last year, indicating the administration’s growing interest in crypto policy.

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