To the President, “MAGA House Republicans” are assisting crypto tycoons.
The Biden administration is setting towards the path of creating more of an enemy out of crypto.
On Tuesday, US President Joe Biden tweeted that “MAGA House Republicans” support “tax loopholes that help wealthy crypto investors,” instead of food safety inspections – perhaps pitting the current American administration further against crypto. The post was made to support his administration’s proposed 2024 fiscal year budget, which so far has failed to make progress due to united Republican opposition in the House.
We don’t have to guess what MAGA House Republicans value. They’re telling us. pic.twitter.com/BM6JGMEFeq
— President Biden (@POTUS) May 9, 2023
While Biden says that reducing the budget is a universal priority, he believes Republicans prefer to cut “programs critical to seniors and middle-class and working families” instead of changing tax codes that will “ensure that the wealthy and big corporations pay their fair share.”
While Biden’s Twitter post calls for Congress to change up their tax codes surrounding crypto tax loopholes, a flurry of responses from Crypto Twitter question the very existence of such loopholes.
“I gave y’all more money than I made off this stuff, while taking all the risk,” replied Dogecoin co-creator Billy Markus. “You also realise most American crypto users aren’t rich, but are using crypto cuz they don’t feel like they have enough to make ends meet—because of you guys?”
Biden’s tweet however misses out on some details in his proposed budget plan.
A White House fact sheet explains that currently, crypto investors aren’t subject to the same rules of the road that investors in stocks or other securities have to follow, allowing them to report excessive losses,” suggesting a pathway towards the alleged loophole in question.
“For example, a crypto investor—unlike an investor in stocks or bonds—can sell a cryptocurrency at a loss, take a substantial tax loss to reduce their tax burden, and then buy back that same cryptocurrency the very next day,” describes the fact sheet.
According to the President, updating tax codes “to apply to crypto assets just like they apply to stocks and other securities” would recover $24 billion.
Taxation at the cost of technological development?
Peter Conradi, community moderator for digital artist Beeple and community manager at Web3 creator platform Async Art, is sceptical about Biden’s claim on crypto taxes – and the actions of US regulators at large against the industry.
Replying to the original tweet, Conradi wrote for Biden to “take [his] foot off the [brakes] of a technological and financial revolution that other nations are tapping into.” He continued, “Most of us are not wealthy, but many of us are simply trying to innovate and create new markets and opportunities for citizens.”
The US is under scrutiny from the crypto sector worldwide, as its authorities will not provide clear regulatory guidance for the industry. Prompting uncertainty, US-based crypto firms have decided to plan moves overseas, bulk up on legal preparations, and even leave game-changing deals – perhaps resulting in inhibiting the growth of the industry itself.
After the collapse of FTX late last year, US Security and Exchange Commission (SEC) chair Gary Gensler has stepped up his campaign against crypto companies as many lawmakers and legislators have criticised the lack of oversight against crypto exchanges.
Now, the SEC is filing lawsuits left and right against many crypto firms for selling unregistered securities, but there remains a few who aren’t supportive of Gensler’s actions, like SEC Commissioner Hester Peirce.
But still the US government is still hard at work in figuring out more ways to financially penalise the crypto industry in the country. The White House is currently building a case for a 30% excise tax on the amount of energy used by crypto miners, while Republican lawmakers are teaming up to prevent the existence of a US central bank digital currency (CBDC), or, a digital dollar.