U.S. President Joe Biden has introduced his proposed fiscal year 2025 budget, which includes plans for implementing a crypto mining excise tax and addressing wash-sale rules for digital assets. These tax measures, similar to those proposed last year, are aimed at generating revenue of nearly $10 billion in 2025 and over $42 billion over the next decade.
The proposed budget outlines various regulations related to cryptocurrencies, including applying wash-sale rules to digital assets, implementing information reporting requirements for financial institutions and digital asset brokers, establishing rules for reporting foreign crypto accounts, and introducing an excise tax on mining activities.
The budget aims to close tax loopholes that primarily benefit the wealthy and profitable corporations, such as eliminating the like-kind exchange loophole, reforming tax incentives for retirement accounts, and ending tax breaks for corporate jets. Additionally, it seeks to modernize the tax code to address tax subsidies for crypto assets, ensuring they are treated similarly to stocks and securities.
The proposal also highlights the prevalence of wash trading in the crypto industry and the need to prevent investors from exploiting tax deductions by quickly rebuying assets after selling them at a loss. It projects significant revenue generation from including digital asset transactions in wash sale rules and mark-to-market rules over the next decade.
While similar proposals were put forth last year, they were not adopted by Congress. Biden’s budget announcement follows his recent State of the Union address, where digital assets were not mentioned. This move comes amid preparations for the upcoming general election in November, where Biden and former President Donald Trump are expected to be the main contenders for their respective parties.