U.S. President Joe Biden unveiled his proposed fiscal year 2025 budget proposal, which included a crypto mining excise tax and addressing crypto in wash-sale rules.
These are similar taxes to those proposed last year, which ultimately weren’t taken up by Congress.
U.S. President Joe Biden will once again pitch a wash trading rule, crypto mining tax and other regulations in his proposed budget for the upcoming year, taxes that the administration suggests could generate nearly $10 billion in 2025, and north of $42 billion over the next decade.
The president’s proposed budget for the upcoming fiscal year, released Monday, includes line items for applying wash sale rules to digital assets; information reporting requirements for financial institutions and digital asset brokers; foreign crypto account reporting rules; including crypto in mark-to-market rules and an excise tax on mining.
“The Budget saves billions of dollars by closing other tax loopholes that overwhelmingly benefit the rich and the largest, most profitable corporations. This includes: closing the so-called ‘like-kind exchange loophole’ that lets real estate investors defer tax indefinitely; reforms to tax preferred retirement incentives to ensure that the ultrawealthy cannot use these incentives to amass tax-free fortunes; preventing the super-wealthy from abusing life insurance tax shelters; closing a loophole that benefits wealthy crypto investors; and ending a tax break for corporate jets,” the proposal said.
Wash trading rules, in traditional markets, aim to stop people from selling an investment for a loss and then quickly rebuying it. The practice has been prevalent in the non-fungible token (NFT) markets in the crypto industry.
Read more: Over $30B of NFT Trading Volume on Ethereum Is Wash Trading, Research Suggests
According to a summary table, the administration projects it could generate over $1 billion in the 2025 fiscal year by including digital asset transactions in wash sale rules alone, and north of $8 billion by including cryptocurrencies in mark-to-market rules. Over a 10-year period, these two rules could generate $25 billion and $7.3 billion, respectively (the budget seems to expect the mark-to-market rules adding to the national deficit after 2025). An excise tax on mining could remove some $7 billion from the national deficit over the next decade, the file said.
Monday’s budget proposal isn’t the first time the Biden administration has sought to impose a mining excise tax or close the wash sales trading loophole. Last year’s budget proposal included similar provisions, though those proposed taxes were ultimately not taken up by Congress in drafting budget bills.
Biden’s unveiling of his budget proposal comes days after his State of the Union address, though he did not mention digital assets in his speech. The speech came two days after Super Tuesday, when Biden and former President Donald Trump seemingly secured their respective parties’ nominations for the 2024 general election taking place this November.
