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The United States President Joe Biden’s proposed budget for the upcoming year outlines key regulations, including a wash trading rule, crypto mining tax, and other measures that could generate nearly $10 billion in 2025 and over $42 billion in the next decade.
The budget targets tax loopholes benefiting the wealthy, closing the ‘like-kind exchange’ and life insurance tax shelter loopholes. Notably, it addresses crypto-related issues such as applying wash sale rules to digital assets and introducing information reporting requirements for financial institutions.
Wash trading rules, commonly applied in traditional markets, aim to prevent the practice of selling and rebuying an investment quickly to claim tax benefits. The proposal suggests modernizing anti-abuse rules to apply to cryptocurrencies, eliminating the ability to sell at a loss for tax reduction and rebuy immediately.
The administration estimates over $1 billion in revenue from including digital asset transactions in wash sale rules and over $8 billion from applying cryptocurrencies to mark-to-market rules in the 2025 fiscal year alone.
Additionally, an excise tax on mining could contribute $7 billion towards reducing the national deficit over the next decade. While similar proposals were made last year, they were not incorporated into budget bills by Congress. The budget aims to address fiscal concerns and promote fair taxation in various sectors.
Also Read: Rep. Emmer Slams Biden’s Mining Industry Data Requests
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