Mar 09, 2023
Biden Budget Proposes Doubled Capital Gains Tax for Millionaires
The Biden administration is set to release its fiscal 2024 budget plan on Mar. 9th, with a proposal that could have a major impact on the crypto space. The proposed budget aims to reduce the deficit by almost $3 trillion over the next decade and raise around $24 billion by making changes to crypto tax treatment.
One of the most noteworthy changes is the proposal to end a crypto trading strategy known as tax-loss harvesting. This strategy involves selling assets at a loss for tax purposes before repurchasing them immediately after. While this strategy is not allowed with stocks and bonds, crypto is currently not under the same rules as digital assets have not been classified as securities.
Koinly’s Danny Talwar commented on the proposed change, noting that it is an inevitable consideration for the US which, if implemented, will put it on par with other jurisdictions such as Canada and Australia. He also added that the timing is significant as many crypto holders who entered the crypto space on the back of 2021 market peaks are suffering from heavy losses.
The Biden budget also proposes to nearly double the capital gains tax rate for investors making at least $1 million, raising it from the current 20% tax rate to 39.6%. It also plans to raise income levies on corporations and wealthy Americans.
The proposed changes could have a major impact on the crypto space, particularly when it comes to NFTs and NFT marketing. With the proposed tax changes, selling NFTs could become more expensive and NFT promotion could become more difficult. This could lead to an increase in the cost of NFT marketing and promotion, making it more difficult for NFT creators to reach potential buyers.
At the same time, the proposed changes could also open up new opportunities for crypto and web3 agencies. As the cost of NFT promotion rises and the complexity of NFT marketing increases, more businesses may turn to professional agencies for help with their NFT marketing efforts. This could lead to an increase in demand for services such as Twitter NFT marketing, NFT marketing agencies, and web3 agencies.
The proposed budget is set to be officially released on Mar. 9th, and the crypto space will be watching closely to see how it will impact the industry. It remains to be seen how the proposed changes will affect the NFT and web3 space, but one thing is certain — the crypto space is in for a wild ride.
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