US President Joe Biden has criticized wealthy crypto investors in a recent tweet, highlighting the divide between his administration and Make America Great Again (MAGA) House Republicans over what should be cut in the federal budget. In the tweet, President Biden proposed cutting tax loopholes that benefit wealthy crypto investors, which are estimated to be worth around $18 billion. In contrast, MAGA Republicans have suggested cutting food safety inspections, which are worth around $15 billion.
President Biden’s criticisms of wealthy crypto investors come as he proposes the Digital Asset Mining Excise tax (DAME) in his fiscal year 2024 budget. Under this proposal, firms would face a tax equal to 30% of the cost of the electricity used for crypto-mining. The tax is set to be implemented next year, and phased in gradually over three years, reaching the target 30% rate by the end of 2026.
In a recent blog post, the White House’s Council of Economic Advisers expressed concern over the amount of electricity used in crypto-mining. They noted that the electricity used in crypto-mining is similar to what is used to power all of the country’s home computers or residential lighting. The proposed DAME tax aims to address this issue by making it more expensive to mine crypto, and thus reducing the amount of electricity used.
President Biden’s fiscal year 2024 budget also includes a proposal to change the tax treatment for “wash sales” of digital assets. Currently, wash sale rules prevent taxpayers from taking a tax deduction for a loss in a wash sale. This occurs when an investor buys security 30 days before or 30 days after selling an identical or similar security. The proposal to apply wash sale rules to digital assets would bring greater consistency to the tax treatment of digital assets.
President Biden’s criticisms of wealthy crypto investors and proposals for greater taxation of crypto-mining reflect the Biden administration’s efforts to address inequality and ensure that wealthy individuals and corporations pay their fair share of taxes. While the proposed DAME tax and changes to wash sale rules are likely to face opposition from some in the crypto community, they are part of a broader effort to create a more equitable tax system.
In conclusion, President Biden’s recent criticisms of wealthy crypto investors and proposals for greater taxation of crypto-mining reflect the administration’s focus on creating a fairer and more equitable tax system. While these proposals may face opposition from some in the crypto community, they represent an important step towards addressing inequality and ensuring that all Americans pay their fair share of taxes.